Following in the footsteps of Morgan Stanley's (MS) - Get Report deal to purchase asset management giant Eaton Vance (EV) - Get Report, Wells Fargo is reportedly considering selling off its asset management business, worth some $3 billion.
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 Friday, citing a person briefed on the matter.
Bids could come as soon as this month. The discussions were first reported by Reuters earlier 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, which following its purchase of Eaton Vance lifts its asset-management division to above $1 trillion in client assets.
Wells Fargo earlier this month posted third-quarter results that rang in below analysts' forecasts, though also noted that 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 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.
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