Wells Fargo could lose up to $1.7bn after fake accounts scandal

California-based investment bank Wells Fargo has warned that the total cost of the fallout from its unauthorised accounts scandal could reach as high as $1.7bn.

Legal costs arising from the various investigations and lawsuits have mounted in the wake of its admission to having set up millions of fake credit cards and accounts for its customers.

Former chief executive officer John Stumpf eventually resigned from his position after facing several congressional and senate committees related to the aggressive sales targets set by the bank.

In a security filing, Wells Fargo said that the $1.7bn figure was "the high end of the range of reasonably possible potential litigation losses" that it may have to assume.

One of the largest banks in the US, Wells Fargo also said that the figure would have little effect on the company's financial standing even in the worst case scenario.

It would not "have a material adverse effect on Wells Fargo's consolidated financial conditions," according to the bank, but it did admit it may "be material to Wells Fargo's results of operations for any particular period."

The scandal was revealed after Wells agreed to pay $185m to regulators as part of civil proceedings against it. Timothy Sloan took over as CEO following Stumpf's resignation.