Wells Fargo today confirmed media speculation it was settling claims with US federal regulators over its risk management, paying a fine of $1 billion. 

The San Francisco-headquartered lender said today it had entered into consent orders with the Office of the Comptroller of the Currency and Consumer Financial Protection Bureau to address risk management and issues relating some of its interest rate-lock extensions on home mortgages and collateral protection insurance placed on certain auto loans.

“For more than a year and a half, we have made progress on strengthening operational processes, internal controls, compliance and oversight, and delivering on our promise to review all of our practices and make things right for our customers,” Timothy J. Sloan, president and chief executive,said.

The orders require Wells Fargo to pay $1 billion in total civil money penalties. As a result, the company will adjust its first-quarter 2018 preliminary financial results by an additional accrual of $800 million, which is not tax deductible. The accrual reduces reported first quarter 2018 net income by $800 million, or $0.16 cents per diluted common share, to $4.7 billion, or 96 cents per diluted common share.

The bank has been hit with a number of regulatory woes. US authorities, including several attorney’s offices, federal and state regulators, have been probing Wells Fargo since late 2016 when the bank disclosed widespread issues surrounding sales practices. Employees had opened as many as 3.5 million accounts without clients’ knowledge.

The company in recent months hired a consultant to try to revamp its procedures and revisited structural changes made in response to the sales-practices scandal. Wells Fargo’s chief risk officer Mike Loughlin is to retire and be replaced.

Wells Fargo is parent of Abbot Downing, which focuses on serving ultra-high net worth clients; no claims of wrongdoing have arisen from this part of the group. Recent financial results for Wells Fargo’s wealth units have been positive. As reported earlier in April, Wells Fargo’s wealth and investment management arm logged net income of $714 million in the first three months of this year, rising 6 per cent from the fourth quarter of last year 2017 and up from $665 million a year ago. WIM revenue of $4.2 billion decreased $91 million, or 2 percent, from the prior quarter, primarily due to lower gains on deferred compensation plan investments , lower net interest income, and lower transaction revenue, partially offset by higher asset-based fees.

For the banking group as a whole, it logged preliminary net income of $5.9 billion, compared with $5.6 billion in first quarter 2017; diluted earnings per share rose to $1.12 from $1.03. Wells Fargo said its results may be revised because of ongoing compliance resolution issues involving US authorities.