Wells Fargo (WFC) - Get Wells Fargo & Company Report reportedly is exploring the sale of its asset-management arm, a business that could fetch more than $3 billion, as it looks to revamp its business.
The San Francisco-based bank, which under CEO Charlie Scharf has been reviewing its broader banking and investment management strategy, began discussing a possible deal with other asset managers and private-equity firms last month, Bloomberg reported, citing a person briefed on the matter.
Bids could come as soon as this month. The discussions were first reported by Reuters on Thursday.
Wells Fargo’s asset management unit held $607 billion at the end of September, according to the company’s most recent financial statements. That puts it behind the likes of Morgan Stanley (MS) - Get Morgan Stanley Report, which following its purchase of Eaton Vance (EV) - Get Eaton Vance Corp. Report lifts its asset-management division to above $1 trillion in client assets.
Wells Fargo earlier this month posted third-quarter results that didn't quite meet analysts' expectations thanks to lower interest rates hitting how much it collects in interest income, though the bank also warned that it's keeping a watchful eye on non-performing assets and how that may impact earnings going forward.
It also noted that while credit results improved in the third quarter as consumer delinquencies held low, payment deferral activities in response to the Covid-19 pandemic could delay the recognition of delinquencies and loan write-offs.
Scharf, who took over the helm at Wells Fargo a year ago, told analysts following the bank's earnings report that he is exploring various options to streamline operations and improve the bottom line -something he plans to outline in more detail in January.
Shares of Wells Fargo were up 1.16% at $23.52 in trading on Friday. The stock has fallen more than 57% this year.