Wells Fargo's scandals are hurting its bottom line

Wells Fargo's earnings keep getting dinged by a laundry list of scandals.

Profit, loans, deposits and revenue all shrank last quarter, Wells Fargo (WFC) said on Friday.

One thing that is going up is expenses. Wells Fargo said operating losses surged 77% last quarter because of various problems in its auto lending, wealth management, mortgage and currency businesses. Overall expenses rose by 3%.

Meanwhile, Wells Fargo said profit declined by 12% during the second quarter, missing Wall Street's expectations. The bank's stock, which has lagged behind the rest of the market, tumbled 3% in premarket trading.

Wells Fargo was also hurt by a $481 million income tax bill linked to a recent Supreme Court ruling that allows states to force online retailers to collect sales taxes.

One bright spot: Wells Fargo is returning gobs of money to shareholders thanks to the corporate tax cut and a clean bill of health from the Fed's stress tests. The bank said it plans to raise its dividend by 10% and buy back up to $24.5 billion of stock.

Still, Wells Fargo's results stand in stark contrast to America's biggest bank. JPMorgan Chase (JPM)said on Friday its profits jumped by 18% to $8.3 billion. That's just shy of JPMorgan's first-quarter haul of $8.7 billion -- which was a record for any US bank.

It's been a very difficult nearly two years for Wells Fargo. A wave of controversy, kicked off by the fake-accounts scandal, have hurt Wells Fargo's reputation, raised its legal expenses and drawn the ire of regulators.

The Federal Reserve harshly penalized Wells Fargo in February by imposing sanctions that prevent the bank from growing its balance sheet. The bank doesn't expect to escape the asset cap until next year.

Regulators also charged Wells Fargo a $1 billion fine for forcing customers into unneeded auto insurance and charging them unnecessary mortgage fees.

Wells Fargo said on Friday that it suffered $619 million of operating losses for "previously disclosed matters," including policies, practices and procedures in its foreign exchange business. Wells Fargo previously disclosed that the government has inquired about this unit. Other areas that Wells Fargo is spending money to clean up include its auto lending business and reviews into how it charges mortgage and wealth management fees.