Wells Fargo Q3 profit dented by legal costs

Wells Fargo posted a decline in third-quarter net income on Tuesday as it took a hit from legal costs relating to a long-standing sales practice scandal.

Net income fell to $4.6bn from $6bn in the third quarter of last year, or $0.92 per diluted common share from $1.13, as the bank put aside $1.6bn for legal expenses. Revenue during the period came in at $22bn, up from $21.9bn.

Interim chief executive officer Allen Parker said: "Our continued efforts to transform Wells Fargo and our unwavering commitment to serve our customers resulted during the third quarter in higher branch customer experience survey scores, growth in primary consumer checking customers, and increased loan and deposit balances.

"We have more work ahead, but I’m confident that our focused efforts and the fundamental strengths of Wells Fargo will continue to enable us to achieve success."

Last month, Wells Fargo announced that it had poached its new chief executive officer and president, Charles W. Scharf - due to start on 21 October - from Bank of New York Mellon.

The bank has been embroiled in a scandal since 2016 after it emerged that some of its employees had created millions of fake bank accounts to meet sales quotas. Wells Fargo has shelled out more than $1.7bn in fines since the scandal broke.