Wells Fargo says litigation costs could exceed provisions by $1.7bn

Wells Fargo, under fire for its sales tactics, said on Thursday its litigation costs could rise as much as $1.7 billion (€1.53 billion) more than the amount it had already earmarked in provisions.

The San Francisco bank had said in August that litigation costs could exceed provisions by as much as $1 billion.

Wells Fargo also said on Thursday the US Securities and Exchange Commission (SEC) is investigating the bank’s sales practices.

Regulatory scrutiny

The bank has faced intense regulatory scrutiny since September over the opening of as many as two million unauthorised accounts, a scandal that led to the departure of former chief executive

John Stumpf

last month.

Wells Fargo in September agreed to pay regulators $185 million in a settlement over the case.

The Wall Street Journal had reported on Wednesday that the SEC is investigating whether Wells Fargo violated rules around investor disclosures and other matters relating to the sales tactics scandal.

The company said it could not determine if a resolution of its sales practices could have a “material adverse effect” on its financial condition.

Goldman Sachs Group separately said it had scaled back its estimate of the legal costs it may face beyond what it has set aside, to $1.7 billion from $2 billion. – (Reuters)