Wells Fargo & Co today reported a 19% profit decline and weaker revenue than Wall Street had expected for the fourth consecutive quarter due to mortgage issues.
The third-largest lender in the US has been embroiled in a prolonged scandal over its sales practices.
It said the dip in earnings came largely from a $1 billion accrual for a legal settlement over issues stemming from before the 2007-2009 financial crisis.
But revenue at the bank also suffered from a decline in mortgage banking revenue.
Wells has been trying to bounce back from a scandal over dishonest sales practices that led to interrogations by US Congress and fueled the ire of millions of consumers.
Wells Fargo said its earnings dropped to $4.6 billion during the third quarter. On an adjusted basis, its profit was $1.04 per share, scraping past estimates of $1.03, according to Thomson Reuters.
Revenue fell 2% to $21.9 billion, hit by a 37% slump in mortgage banking. Analysts had forecast revenue of $22.4 billion.
Wells Fargo's operating efficiency ratio, which measures expenses as a portion of revenue, was 65.5% during the quarter and 63.1% year to date.
Expenses have been a key issue for investors, and the bank has targeted a full-year ratio of 60-61% in 2017, aiming to improve to 55-59% next year.
Wells is committed to its plan to cut costs by $4 billion by the end of 2019, half of which will be reinvested into businesses, its chief financial officer John Shrewsberry said in a statement.
Net income in Wells Fargo's community banking segment, the largest of its three major businesses and the one most directly impacted by the sales scandal, was $2.2 billion, down 31% from a year ago due to the legal charge.
Wells Fargo is the largest US residential mortgage lender, making more than $98 billion worth of loans in the first half of the year, according to trade publication Inside Mortgage Finance.
That is nearly double the total for JPMorgan Chase & Co JPM.N, the number two mortgage lender.
Wells Fargo has also been keeping a greater share of the mortgages it makes, boosting loan growth.