Scandal-hit Wells Fargo sees fourth straight quarter fall

Wells Fargo reported its fourth straight fall in quarterly profit as it set aside funds for potential legal costs amid an increasingly politicised bogus-account scandal that cost chief executive and chairman John Stumpf his job.

The bank, which has 157 employees in Dublin, faces numerous US federal and state investigations into its practices. It said noninterest expenses rose due in part to higher litigation accruals and salaries.

Net income applicable to shareholders fell 3.7 per cent to $5.24 billion, or $1.03 per share, from $5.44 billion, or $1.05 per share, a year earlier.

Analysts on average had expected the number three US bank by assets to report earnings of $1.01 per share, according to Reuters. It was not immediately clear if the figures reported on Friday were comparable.

Stock analysts have cut profit forecasts for the bank for quarters to come following the revelation that bank employees had opened as many as 2 million accounts without customers’ knowledge or permission to meet aggressive sales targets.

The San Francisco-based bank has already agreed to pay $185 million to settle regulatory charges and fired about 5,300 employees in connection with the scandal.

Several big customers, including California and Illinois, have also suspended business relations with the bank.

The scandal is a rare setback for the bank, which emerged from the financial crisis relatively unscathed.

– Reuters