Wells Fargo is said to weigh sale of retirement plan unit
(Bloomberg) – Wells Fargo is considering a sale of its retirement plan services business, according to people familiar with the matter.
The unit could fetch as much as $1 billion, said one of the people, who asked to not be identified because the matter isn’t public. The people said deliberations are at an early stage and the bank may decide to keep the business, which offers record-keeping, trust, custody and other retirement-plan services to corporations.
A representative for San Francisco-based Wells Fargo declined to comment on the potential sale.
Wells Fargo, the third-largest U.S. bank by assets, has been unloading business lines this year amid an enterprise-wide review following a string of consumer scandals. The company’s problems erupted in 2016 on the revelation that employees created as many as 3.5 million accounts on behalf of customers who didn’t want them. In February, the Federal Reserve banned Wells Fargo from growing assets past their December 2017 level until the bank rights its missteps.
Wells Fargo has agreed to sell its branches in three Midwestern states, as well as businesses including its Puerto Rico auto lender and a payroll services unit. It’s weighing a sale of real estate brokerage Eastdil Secured, a person familiar with the matter said in July.
The retirement-plan services business is part of Wells Fargo’s wealth and investment-management division, which also includes the brokerage Wells Fargo Advisors and Abbot Downing, a wealth manager that caters to the ultrarich.
Jonathan Weiss, who heads the bank’s wealth and investment-management arm, has been working to streamline the unit since he took over last year. He is targeting around $600 million in savings by 2020, he said at the firm’s investor day in May. In August, Weiss said he plans to hire an operations executive to review the unit’s efficiency.