Wells fargo WFC has signed a definitive agreement to sell its Corporate Trust Services (CTS) business to Australian company Computershare Limited for $ 750 million. This is in line with the company’s strategy of focusing on activities at the heart of its consumer and business customers. The transaction, which is expected to close in the first half of 2021, is still subject to customary closing conditions.
Computershare is one of the world’s leading providers of corporate trust, share transfer and employee share ownership plans.
Wells Fargo’s CTS business provides a wide range of services, such as trust and agency related to debt securities issued by public and private entities, government agencies, and the banking and securities industries.
Computershare executive vice president of operations Frank Madonna will lead the acquired operations, as nearly 2,000 CTS employees across the United States are expected to transfer under the deal.
Wells Fargo Commercial Capital Director David Marks said: “In addition, we believe Computershare’s similar approach to service and focus on developing innovative products will be valuable to our customers and colleagues. Corporate Trust Services in the future.
Likewise, Madonna said, “We are confident that as our businesses regroup after closing, our client proposition will be unmatched in North America. “
Wells Fargo has taken such steps in an effort to focus on its core businesses, increase efficiency and strengthen its balance sheet. The economic slowdown caused by the pandemic accelerated this initiative.
Last February, Wells Fargo signed an agreement to sell its asset management business to private equity firms GTCR LLC and Reverence Capital Partners, LP for $ 2.1 billion. In January, the bank announced a definitive agreement to sell its Canadian direct equipment financing business to The Toronto-Dominion Bank TD for an undisclosed amount.
Last December, the company agreed to divest its portfolio of private student loans and its Centurion Life Insurance unit. Earlier in June, Wells Fargo sold its feeder fund platform for global alternative investments.
Following the disclosure of the sales scandal in September 2016, Wells Fargo faced several sanctions, including a Federal Reserve cap on asset growth in early 2018. However, the company has come a long way in its path. recovery, in particular with the recent approval by the central bank of its plan to overhaul risk management and governance. The company continues to invest in businesses to strengthen its compliance and risk management capacity.
Wells Fargo shares have gained 61.7% in the past six months, outperforming the industry’s 60.8% growth.
Currently, Wells Fargo carries a Zacks Rank # 3 (Hold). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Recent steps in corporate restructuring by other banks
In recent times, corporate restructuring efforts in the financial sector have increased. In January 2021, SVB Financial Group SIVB has signed a stock-cum-cash agreement to acquire Boston Private Financial Holdings, Inc. BPFH for $ 900 million to strengthen its private banking and wealth management offerings.
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