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Wells Fargo Mulls Over Divesting Insurance Brokerage Unit
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Wells Fargo & Company (WFC - Free Report) is considering sale of its insurance brokerage business, as reported by Bloomberg. Per the people familiar with the matter, the divesture might result in a return of about $2 billion.
The company has started approaching private equity firms in order to discern their interest in Wells Fargo Insurance Services USA Inc. The report also indicated that Wells Fargo has not yet made any decision regarding when it shall hold the formal auction.
Wells Fargo is considering closure of this business as it doesn’t generate satisfactory returns. The company’s brokerage unit is one of the largest in the U.S. and is also financially strong but fails to contribute satisfactorily to the overall return on equity. Actually, the company is considering this disposition to increase profits by effectively managing expenses.
The private equity firms have lately been showing an increased interest in insurance brokerage firms, making it a suitable time for the company to consider the divesture.
The company has been actively selling its units in order to enhance its operational efficiency. Further, it experiences decent organic growth on the back of its diverse geographic footprint and solid business mix.
Though the company’s reputation may take some time to improve due to its involvement in fake accounts scandal, it has been actively taking steps for the same.
Shares of Well Fargo have gained 6.6% over the last six months, underperforming the 13.2% growth for the Zacks categorized Banks - Major Regional industry.
Stocks worth considering in the finance space include M&T Bank Corporation (MTB - Free Report) , sporting a Zacks Rank #1, Northern Trust Corporation (NTRS - Free Report) and The PNC Financial Services Group, Inc. (PNC - Free Report) , both carrying a Zacks Rank #2 (Buy).
M&T Bank witnessed an upward earnings estimate revision of 4.6%, over the past 30 days. Also, its share price gained 38.1% over the last one year.
Northern Trust's earnings estimates moved upward by 1.9% over the past 30 days, for the current year. Its share price increased 29.4%, over the last one year.
PNC Financial’s current-year earnings estimates were revised 2.4% upward, over the past 30 days. Over the last one year, its share price surged 42.8%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Wells Fargo Mulls Over Divesting Insurance Brokerage Unit
Wells Fargo & Company (WFC - Free Report) is considering sale of its insurance brokerage business, as reported by Bloomberg. Per the people familiar with the matter, the divesture might result in a return of about $2 billion.
The company has started approaching private equity firms in order to discern their interest in Wells Fargo Insurance Services USA Inc. The report also indicated that Wells Fargo has not yet made any decision regarding when it shall hold the formal auction.
Wells Fargo is considering closure of this business as it doesn’t generate satisfactory returns. The company’s brokerage unit is one of the largest in the U.S. and is also financially strong but fails to contribute satisfactorily to the overall return on equity. Actually, the company is considering this disposition to increase profits by effectively managing expenses.
The private equity firms have lately been showing an increased interest in insurance brokerage firms, making it a suitable time for the company to consider the divesture.
The company has been actively selling its units in order to enhance its operational efficiency. Further, it experiences decent organic growth on the back of its diverse geographic footprint and solid business mix.
Though the company’s reputation may take some time to improve due to its involvement in fake accounts scandal, it has been actively taking steps for the same.
Shares of Well Fargo have gained 6.6% over the last six months, underperforming the 13.2% growth for the Zacks categorized Banks - Major Regional industry.
Currently, Wells Fargo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Stocks worth considering in the finance space include M&T Bank Corporation (MTB - Free Report) , sporting a Zacks Rank #1, Northern Trust Corporation (NTRS - Free Report) and The PNC Financial Services Group, Inc. (PNC - Free Report) , both carrying a Zacks Rank #2 (Buy).
M&T Bank witnessed an upward earnings estimate revision of 4.6%, over the past 30 days. Also, its share price gained 38.1% over the last one year.
Northern Trust's earnings estimates moved upward by 1.9% over the past 30 days, for the current year. Its share price increased 29.4%, over the last one year.
PNC Financial’s current-year earnings estimates were revised 2.4% upward, over the past 30 days. Over the last one year, its share price surged 42.8%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>