Wells Fargo (NYSE: WFC) is reportedly mulling a sale of its private-label credit card business as the bank continues to look for ways to slim down and refocus its business, according to Bloomberg, which cited anonymous sources.
The rumors align with other recent reports that say the bank is also considering a sale of its asset management division, which has $607 billion assets under management, as well as its corporate trust division and student loan portfolio, which could be worth roughly $10 billion.
CEO Charlie Scharf said on the bank’s third-quarter earnings call said that he is looking “to exit some things which aren’t core to the U.S. banking franchise.” Scharf has also indicated that the bank is interested in cutting annual expenses by around $10 billion to get its cost structure in line with its peers.
Image source: Wells Fargo
The private-label credit card business partners with retailers, so people can purchase items on credit when they check out.
According to Bloomberg, CFO John Shrewsberry, who is about to retire, said in 2014 that the bank would look to strengthen its private-label business. But since then, the bank has failed to pick up market share in the growing segment.
Wolfe Research analyst Bill Carcache put out a report that cited potential buyers of the business, including Synchrony Financial (NYSE: SYF), a leader in the private-label card market. Other potential buyers Carcache listed include Alliance Data Systems (NYSE: ADS), Capital One Financial (NYSE: COF), Citigroup (NYSE: C), and Goldman Sachs (NYSE: GS) .
10 stocks we like better than Wells Fargo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Wells Fargo wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of October 20, 2020
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.