Benzinga | Oct 27, 2020 02:19AM EDT

Wells Fargo Considers Sale Of Corporate-Trust Unit, Student-Loan Portfolio: Report

Wells Fargo & Co (NYSE:WFC) has been reportedly planning to offload some of its units which are not part of its core U.S. banking franchise. The latest ones to be put up for sale may include its corporate trust unit for proceeds of $1 billion or more as well as its portfolio of student loans, according to Bloomberg.

What Happened Earlier this week, there were reports that the bank is planning a sale of its asset management business valued at over $3 billion.

Wells Fargo Corporate Trust Services (CTS) falls under the bank's commercial banking unit and caters to clients with annual revenue greater than $5 million. The unit saw a senior-level change with the appointment of Patricia Sutter as the head of CTS in Oct. 2019.

Why Does It Matter Wells Fargo CEO Charles Scharf during the third-quarter earnings call earlier this month said the bank was looking to exit some of the non-core businesses, including private student loans, the Wall Street Journal reported.

The Wells Fargo student-loan portfolio is worth close to $10 billion. Scharf is shifting the bank's focus from non-core business segments with an emphasis on reducing costs. The CEO plans to achieve an annual cost savings target of $10 billion.

In April 2019, Wells Fargo entered into a sale agreement for its Institutional Retirement and Trust Business with Principal Financial Group (NASDAQ:PFG) for a consideration of $1.2 billion.

Price Action WFC stock closed Monday 2.49% lower at $22.70 per share.

Photo courtesy: Ken Teegardin via Flickr