Wells Fargo Weighs Sale of Asset-Management Arm–Reports
(Bloomberg) — Wells Fargo & Co. is exploring the sale of its asset-management unit, a business that could fetch more than $3 billion, according to a person briefed on the matter.
Chief Executive Officer Charlie Scharf, who took over last October, is preparing to lay out his vision for turning around the lender after scandals under his predecessors. He told analysts this month he’s exploring a wide range of options and that he would provide more information to investors in January. The San Francisco-based company’s stock has slumped 57% this year.
A Wells Fargo spokesperson declined to comment. The discussions were reported by Reuters earlier Thursday.
Asset management has seen a wave of consolidation in recent years with banks bulking up their divisions to run them more efficiently, or selling them to rivals eager to grow trillion-dollar franchises. They’re reacting to a squeeze on fees from cutthroat competition and a shift to passive fund management.
The pressure on small and medium-size managers comes from the very top of the industry, which is dominated by index fund giants BlackRock Inc. and Vanguard Group.
Among major U.S. banks, Wells Fargo’s business is a mid-sized player, with $607 billion in assets under management at the end of September. Morgan Stanley’s purchase of Eaton Vance, announced this month, will vault it into club of asset managers with $1 trillion in client assets, joining JPMorgan Chase & Co. and Goldman Sachs Group Inc. Rivals, including Citigroup Inc. and Bank of America Corp., do not have major presences in that business.