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Bloomberg
Wells Fargo & Co. is edging closer to a settlement with regulators over the crisis-era mortgage bonds investigation that took a $1 billion chunk out of third-quarter profit, according
to Chief Financial Officer John
Shrewsberry.
“We are now having a negotiation, so it’s a matter of probably months or quarters, not anything more than that,†Shrewsberry said. The bank took the $1 billion charge for regulatory investigations into its pre-crisis mortgage activity because it has “gotten to the point in our negotiations where you could say that an outcome like this is both probable and estimable,†he said.
Wells Fargo, whose mortgage-bond business was far smaller than rivals’, is one of the last of the global lenders to reach an accord with the US Department of Justice over alleged wrongdoing in selling the toxic securities. HSBC Plc is also in talks to resolve similar allegations, Bloomberg News reported in July.
UBS Group AG’s probe is still unresolved, while Royal Bank of Scotland Group Plc agreed to pay $5.5 billion in July to settle two of three parts of its investigation.
Of those banks, Bloomberg Intelligence analysts estimate Wells Fargo would probably pay the least.