Jan 13 Reuters Wells Fargo Co on Friday reported a 50 decline in profit for the fourth quarter as the bank racked up more than 3 billion in costs related to a fake accounts scandal and boosted loan loss reserves for a potential economic slowdown.

The bank39;s shares were down 2.6 in premarket trade.

Provision for credit losses was 957 million in the quarter, compared with a 452 million release a year earlier.

Provision for credit losses in the quarter included a 397 million increase in the allowance for credit losses primarily reflecting loan growth, as well as a less favorable economic environment, the bank said.

Banks are building up rainy day funds as U.S. Federal Reserve policymakers decide on the future path of interest rates.

After aggressively raising interest rates in an attempt to bring soaring inflation to heel, Fed policymakers say they are encouraged by the recent slowing in jobs and wage growth that could temper inflation.

The outlook for big U.S. banks has been further clouded by the RussiaUkraine conflict and fading stimulus measures. Higher borrowing costs have also softened demand for mortgages and car loans, crimping banks39; revenues.

Meanwhile, a slump in dealmaking has weighed on banks39; investment banking businesses, which had a blockbuster 2021.

Wells Fargo is still working to contain the fallout from a sixyearold scandal over its sales practices that led to hefty fines and an asset cap imposed by the Fed on the lender39;s ability to…