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Wells Fargo thinks it has paid back customers as required

A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith

By Dan Freed and Michael Erman

(Reuters) - Wells Fargo & Co (WFC.N), the third-largest U.S. bank by assets, said on Friday it believes it has reimbursed the customers it needs to in order to comply with at least one of three settlements over a bogus-accounts scandal.

"We've accomplished a lot over the past few months but we still have a lot of work to do ... to rebuild trust with our customers, team members, and other key stakeholders," CEO Tim Sloan said during a call with analysts.

The San Francisco-based bank has been dealing with multiple lawsuits and a sharp drop in account openings after it settled with the Los Angeles City Attorney, the U.S. Comptroller of the Currency and the Consumer Financial Protection Bureau in September over charges that its employees created as many as 2 million accounts without customers' consent.

Chief Executive Sloan - who took over after John Stumpf resigned in the wake of the scandal - said he was pleased with the progress the bank has made in customer remediation, as well as its ongoing review of sales practices across the company.

The bank disclosed the new details as it posted its fifth straight decline in quarterly earnings on Friday, results that diverged from rivals JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N). Both posted significantly higher earnings on Friday on the back of higher interest rates and market gains since the U.S. election in November.

Wells Fargo's net income applicable to shareholders fell 6.4 percent to $4.87 billion, or 96 cents per share, in the fourth quarter, from $5.20 billion, or $1.00 per share, a year earlier.

It said it has made $3.2 million of refunds for potentially unauthorized accounts that incurred fees and charges, which it believes fulfills its repayment requirements under the settlement to the L.A. City Attorney.

But L.A. City Attorney Mike Feuer said it was "too soon to say that all affected Wells Fargo customers have been made whole."

He noted that, under the settlement, the bank is required to offer mediation to customers who feel they have not been made completely whole until September 2018.

It could not be determined whether the bank has reimbursement requirements under the other two settlements. A spokesman for Wells Fargo had no immediate response.

The bank agreed in September to pay $185 million in penalties and up to $5 million to customers who, regulators say, were pushed into fee-generating accounts they never requested.

Wells Fargo also said it is still analyzing whether additional unauthorized accounts were opened in 2009 and 2010, which goes beyond its requirements under the settlement.

The bank also said that more than 177,000 accounts that had potentially unauthorized credit cards opened, or unauthorized inquiries made, had credit score declines.

The scandal hammered Wells Fargo's stock for roughly two months. It also forced the bank to change its compensation plan and scrap sales targets in order to emphasize customer service.

The bank is still conducting other internal inquiries to determine who else may be responsible for the sales problems, and has said it will make amends in various ways, from compensating customers whose credit scores may have been harmed to welcoming back employees who may have been fired for the wrong reasons.

Wells Fargo's non-interest expenses rose 4.9 percent to $13.22 billion, reflecting higher legal costs.

"Our key conclusion is that legal and remediation costs are likely to undermine asset growth, creating downside risk," Guggenheim Securities analyst Eric Wasserstrom wrote in a research note.

Like other U.S. bank stocks, Wells Fargo's shares have risen sharply since the election of Donald Trump.

The bank's shares were up 1 percent at $55.07 Friday, well above their low of $43.55 in the aftermath of the settlement announcement.

(Reporting by Dan Freed in New York and Nikhil Subba in Bengaluru; editing by Michael Erman and Nick Zieminski)