Wells Fargo reports slight drop in profit

[NEW YORK] Wells Fargo & Co, which has been mired in litigations stemming from a sales scandal, reported a 0.6 per cent fall in quarterly profit on Thursday, hit by weaker mortgage banking fees and higher costs.

The third-largest US bank by assets said net income applicable to common shareholders fell to US$5.06 billion, or US$1.00 per share, in the first quarter ended March 31, from US$5.09 billion, or 99 cents per share, a year earlier.

Analysts on average had estimated earnings of 96 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.

Wells Fargo has been dealing with multiple lawsuits and regulatory inquiries since government investigations found in September that some of its employees had opened as many as two million accounts without customers' knowledge.

The scandal damaged the bank's folksy image and also led to the ouster of Chief Executive John Stumpf, but growing deposit balances and a stable level of account closings show that profitability in the long run should not be hampered.

The company has been reporting customer activity in its branch banking unit on a monthly basis ever since the scandal, in an effort to be transparent with investors and to win back their trust.

Wells Fargo's total revenue fell 0.9 per cent to US$22 billion.

REUTERS