In a meeting with investors, Wachovia Corp. chief executive Bob Steel remained vague on plans to shed “non-core assets” but didn't rule out the possible sale of the company's insurance business, according to an analyst report Friday.
Steel said the sale of assets and businesses would likely bring Wachovia hundreds of millions of dollars, not billions, as the Charlotte bank looks to shore up its capital base, wrote Sandler O'Neill + Partners analyst Kevin Fitzsimmons, who attended Thursday's meeting.
Steel confirmed he considers retail/commercial banking, corporate and investment banking and brokerage as core to the company, Fitzsimmons wrote. Steel also said Wachovia has a “long-term ambition for asset management,” appearing to scuttle talk of a sale of Wachovia's Evergreen Investments unit.
As for the insurance brokerage, management said it liked the business but acknowledged “certain attributes make it saleable,” according to the report. The business is operated relatively separate from the bank, isn't an outsized contributor to revenues and could fetch a good price despite industry turmoil, Wachovia told the investors.
The Observer reported on its Web site Wednesday that the insurance business could be a possible sale candidate.
In 2007, Wachovia Insurance Services was the nation's 12th biggest insurance brokerage, with $422.5 million in revenue, down from No. 11 the previous year, said Business Insurance magazine. Wachovia trailed far behind No. 1 Marsh & McLennan Cos. Inc., which tallied $5.5 billion in revenue.