Wells Fargo’s 3Q profit falls on higher legal costs

Friday, 13 October 2017, 07:32:16 PM. Wells Fargo reported third-quarter earnings on Friday, Oct. 13, 2017.

Wells Fargo on Friday said its third-quarter earnings fell 18 percent in the third quarter as the San Francisco-based bank set aside money for mortgage-related litigation.

The third-largest U.S. bank by assets reported a profit of $4.6 billion in the three-month period ended Sept. 30, compared with $5.6 billion a year ago.

The earnings of 84 cents per share fell short of analyst expectations of $1.04, according to Zacks Research. In pre-market trading, the bank’s were down 2 percent to $54.01.

In the quarter, Wells said it set aside $1 billion to cover legal costs associated with “previously disclosed mortgage-related regulatory investigations.” That amounted to an expense of 20 cents per share.

Wells, which maintains its biggest employment hub in Charlotte, is still working to recover from a massive sales scandal that erupted last fall. Earlier this month, CEO Tim Sloan defended the bank’s efforts to fix its problems amid questioning before the Senate Banking Committee.

“Over the past year we have made fundamental changes to transform Wells Fargo as part of our effort to rebuild trust and build a better bank,” Sloan said in a statement Friday. “While our financial performance in the third quarter included the impact of a litigation accrual for previously disclosed, pre-crisis mortgage-related regulatory investigations, I am proud of the commitment of our 268,000 team members who put our customers first.”

Earlier Friday, Charlotte-based Bank of America reported $5.6 billion in third-quarter profit, an increase of 13 percent for the from the same period a year ago.

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