Wells Fargo & Co., which lost its status as the world's most valuable lender after a scandal in its retail bank, said profit dropped 5.4% as revenue from its mortgage business declined.

Net income fell to $5.27 billion, or 96 cents a share, from $5.58 billion, or $1, a year earlier, the San Francisco-based company said Friday in a statement. The average estimate of 29 analysts surveyed by Bloomberg was for adjusted profit of $1 a share. Results included a 7-cent cost tied to ineffective hedges on the firm’s long-term debt, according to the statement.

In the three months he’s held the job, Chief Executive Officer Tim Sloan has been trying to quell a scandal over accounts opened without customer authorization. He faces investigations from authorities including the U.S. Department of Justice and the Securities & Exchange Commission after regulators fined the bank $185 million and former CEO John Stumpf was forced to resign.

"I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters," Sloan, 56, said in the statement.

Wells Fargo has surged 20% since the Nov. 8 victory by President-elect Donald Trump amid optimism that his agenda will boost financial firms. The shares slipped 20 cents to $54.30 in early trading at 8:36 a.m. in New York.

Revenue was unchanged from the prior year at $21.6 billion. Expenses rose 4.9% to $13.2 billion as the bank spent more on operating leases, contract services and outside professional services.

Net interest margin, the difference between what a bank charges for loans and pays for deposits, rose 5 basis points to 2.87% from three months earlier.

Mortgage revenue declined 15% from a year earlier to $1.42 billion, missing some analyst estimates. Oppenheimer & Co.'s Chris Kotowski expected $1.67 billion while Atlantic Equities' Christopher Wheeler anticipated $1.6 billion. Servicing income slumped 73 percent to $196 million, hurt by hedging losses.

Net interest income, including the impact of loan loss provisions, rose 7.8% to $11.6 billion from a year earlier. Fourth-quarter provisions for credit losses fell 3.1% to $805 million.

Wholesale banking fourth-quarter profit rose 4.3% to $2.19 billion from a year earlier, while wealth-management net income gained almost 10% to $653 million, according to the statement.

Income generated from credit card fees advanced to $1 billion from $966 million a year earlier, while deposit-account service charges rose to $1.36 billion from $1.33 billion.

Wells Fargo has had trouble courting new retail-bank customers since revelations of the scandal, even after it sought to limit the damage with a nationwide ad campaign. Customers have opened fewer checking accounts and submitted fewer credit-card applications each month, compared with a year earlier, since regulators announced a settlement with the bank on Sept. 8.

The scandal has centered on a practice known as cross-selling, in which retail-bank employees were urged to pitch as many bank products as possible to each customer. Sloan's deputy, Mary Mack, announced this week that the bank’s new compensation plan for community-bank employees eliminates those sales goals, which were identified by regulators as an inducement to employee wrongdoing.

The bank must "shake off the cross-sell scandal and build back trust as quickly as possible," John McDonald, an analyst at Sanford C. Bernstein & Co., wrote in a Jan. 5 note. "It's imperative for management to get things right."

Bloomberg News