Wells Fargo profit slumps ahead of new CEO’s takeover

Wells Fargo's third-quarter profit missed Wall Street's expectations on Tuesday, dragged down by a staggering $1.6 billion in legal costs connected to a scandal that broke out more than three years ago.

The nation's fourth-largest bank reported net income of $4.6 billion, or 92 cents per share, in the third quarter, down 23 percent from the year-ago period ($1.13 per share). Analysts surveyed by Refinitiv expected the lender to post a profit of $1.15 per share.

“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,” Wells Fargo interim CEO Allen Parker said in a statement on Tuesday.

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Last month, Wells Fargo named former Bank of New York Mellon CEO Charles Scharf as its new chief executive and president. He will officially take over on Oct.21.

The California-based company has been mired in several scandals over the past few years; in 2016, the Consumer Financial Protection Bureau dinged Wells Fargo with a $100 million fine for opening 2 million phony accounts. Two years later, the CFPB slapped the bank wit ha record $1 billion fine for misbehavior in its auto and mortgage businesses, like charging customers for auto insurance they didn’t need, or pushing some to default on their loans and lose their cars through repossession.