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November 12, 2020Blog Posts

Wells Fargo explores selling private-label card unit

PaymentsSource

Wells Fargo is exploring selling a unit offering store-branded credit cards as the bank chooses businesses to keep or break off in a broad strategic overhaul, according to people with knowledge of the matter.

The unit providing so-called private-label cards and point-of-sale financing strikes agreements with retailers so that shoppers can buy merchandise such as jewelry, appliances and furniture on credit. The bank has started reaching out directly to possible bidders, the people said, asking to not be named because talks are private.

Chief Executive Charlie Scharf, who took over last year, has been poring over the San Francisco-based bank’s operations. The company has started gauging bidders’ interest in a variety of businesses, with talks emerging in recent weeks to potentially sell a $607 billion asset manager, corporate-trust unit and $10 billion student-loan portfolio.

Spending in the private-label card market rose to about $191 billion last year, but Wells Fargo isn’t among the top five firms there, and it’s unclear how much its retail-financing unit is worth. The bank hasn’t made a final decision on a sale and could still opt to keep it, the people said. A company spokesperson declined to comment on confidential deliberations.

Source

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