Wells Fargo (WFC) sells its private student loan portfolio
Wells fargo WFC has agreed to sell its portfolio of private student loans to investors. The transaction is expected to close in the first half of 2021. With the closing of the sale, the portfolio will be managed by Firstmark, a subsidiary of Nelnet, Inc. NNI.
In September, Wells Fargo informed clients of its desire to leave the private student loan industry. However, the company will continue to accept new loan applications from existing customers until January 28, 2021. As of September 30, 2020, the company’s private student loan portfolio had a principal balance of $ 10 billion.
Wells Fargo has taken several divestiture steps over the years to focus on its core businesses, increase efficiency and strengthen its balance sheet. This enabled the bank to achieve significant cost savings.
Earlier this month, the company agreed to sell Centurion Life Insurance to Bestow, a digital life insurance platform. In June 2020, Wells Fargo sold its Global Alternative Investments Feeder Fund platform to a financial technology company, iCapital Network, with the goal of simplifying operations and delivering innovative products to the bank’s clients.
Although after the sales scandal erupted in September 2016, Wells Fargo suffered from several sanctions, including a Federal Reserve cap on asset growth in early 2018, the company has come a long way in its recovery journey. He continues to invest in businesses to improve compliance and risk management capability. This makes the bank less vulnerable to regulatory headwinds.
Wells Fargo shares have gained 6.1% in the past six months against industry growth of 17.5%.
Currently, Wells Fargo carries a Zacks # 3 (Hold) rank. You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.
Amid the economic downturn induced by the coronavirus pandemic, several financial companies are taking initiatives to focus on core businesses. In November, People’s United FinancialPeople’s United Bank, a banking subsidiary of PBCT, has completed the sale of People’s United Insurance Agency to AssuredPartners.
At the end of this September, Umpqua Holdings Corporation UMPQ has signed an agreement to sell the wealth management business to Steward Partners Global Advisory, LLC. In addition, CIT Group sold its trust and wealth advisory business to Sunflower Bank, NA, a subsidiary of FirstSun Capital Bancorp, based in Denver, CO.
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