Wells Fargo is still recovering from a sales practices scandal during which the bank opened accounts and enrolled clients in products or services without their consent. The firm reported a $3.25 billion litigation expense during the fourth quarter 2017 related to mortgage regulatory investigations, sales practices and other consumer-related matters.
Results in the firm’s wealth and investment management segment were mixed. Recruiting took a hit, with total headcount at 14,544 advisors, down 0.14 percent sequentially and 2 percent over a year ago.
Net income in the segment was $659 million, down 7 percent from the third quarter. Revenue was $4.3 billion, up $59 million from the prior quarter, due to higher asset-based fees and transaction revenue, the firm said.
But higher market valuations paid off for the segment, as total client assets reached a record-high of $1.9 trillion, 11 percent higher than a year ago.
Referrals resulting from the wealth and investment management and community banking partnership were flat sequentially and up 12 percent from a year ago.
Overall, the bank reported net income of $6.2 billion, or $1.16 a share, during the quarter, up from $5.3 billion during the year-ago period. Revenue was $22.1 billion, up 2.4 percent year-over-year, missing analysts’ expectations by $240 million, according to SeekingAlpha.com.
The firm’s results also included a $3.35 billion after-tax benefit from the Tax Cuts & Jobs Act.