Wells Fargo has been dogged by problems since 2016 when the company was fined for creating millions of fake accounts. The bank is now on its third CEO since the scandal and has underperformed most of its peers in the last four years as it has dealt with the aftermath.
However, as part of Charles Scharf’s plan to turn around the company, he has stated he is seeking to cut costs and divest non core businesses. It is the former that has caused Scharf to explore the sale of Wells Fargo’s asset management business which currently manages over $600 billion in assets.
A group of private equity funds are reportedly in late stage talks to buy the division for over $3 billion. If the deal goes through, it would be the next in a series of deals which Wells Fargo has announced, including the sale of a student loan portfolio to a group of investors and one of its Canadian business lines to TD Bank.