The tab from the phony-accounts fiasco at Wells Fargo continues to grow.

Speaking to analysts and investors Wednesday, Chief Financial Officer John Shrewsberry projected that legal costs and other expenses related to the scandal will swell to between $50 million and $60 million and remain at that level for the next several quarters. Last month, Shrewsberry said that expenses had increased by $40 million to $50 million per quarter in the wake of revelations that branch employees opened as many as 2 million fake customer accounts between 2012 and 2016.

The sales scandal has also taken a big bite out of new retail banking business at Wells. The bank said last month that consumer checking account openings fell by 40% in December, while credit card applications dropped by 43%.

“The decline in the rate of new account openings may impact the pace of future revenue growth, so we’ll continue to be transparent regarding these trends, and will provide January trends later this month,” Shrewsberry said at the Credit Suisse Financial Services Forum in Miami Beach, Fla.

Wells Fargo chief financial officer John Shrewsberry.
While other banks are making loud calls for regulatory relief, scandal-plagued Wells Fargo is keeping its head down. "We can play the hand that we've been dealt. It's much more important for us that our customers feel liberated," Chief Financial Officer John Shrewsberry said Wednesday.

Loan performance has been a bright spot for Wells in recent quarters, with nonperforming assets falling to $11.4 billion in 2016, less than half their level four years earlier. Shrewsberry said that overall credit quality remains stable and strong, but he also warned about the risks in certain asset classes, including commercial real estate and auto loans.

He was similarly cautious when asked about the prospects for an improved U.S. business climate under the administration of President Donald Trump.

“People want to believe that there’ll be a more business-friendly environment,” Shrewsberry said. “I’d say expectations are high, and now they need to be delivered" on.

When asked about Wells Fargo’s wish list for regulatory changes, Shrewsberry did not focus on particular ways that U.S. banking rules might be scaled back. A bigger priority is changing business regulations in ways that will benefit the bank’s customers, he said.

“We can play the hand that we’ve been dealt. It’s much more important for us that our customers feel liberated,” Shrewsberry said. “It’s all better if we’ve got more customers doing more business with more banking needs that we can satisfy.”

Shrewsberry also addressed Wells Fargo’s ongoing efforts to fix deficiencies in its resolution plan, in the event of a failure, without endangering the rest of the financial system. In December, the Federal Reserve and Federal Deposit Insurance Corp. found Wells’ living-will submission to be inadequate. It was the second time that the bank’s plan was rejected. The $1.9 trillion-asset company has until March 31 to resubmit its plan, and faces the threat of business restrictions if its submission again fails to pass muster.

Shrewsberry said that the bank is doing everything it can to meet regulators’ expectations. “I’ll probably be filing a tax return in the District of Columbia this year, because I’m spending a lot of time there,” he said.

Separately, Wells Fargo executives said that the bank remains committed to helping finance the Dakota Access Pipeline, the construction of which was halted last year by the Obama administration but has been revived under President Trump. The controversial pipeline is expected to ship almost half a million barrels of crude a day from North Dakota’s shale fields to refineries in Illinois.

“We have an obligation,” CEO Tim Sloan said Wednesday at the Yahoo Finance All Markets conference in New York. “We are one of 17 banks providing a credit facility to one of our customers to build the pipeline. That credit facility was properly vetted and independently reviewed within Wells Fargo, and we thought it made sense."

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