Banking

Wells Fargo is selling a business based in Charlotte. Here’s what we know.

Wells Fargo CEO Tim Sloan announces his retirement

Wells Fargo CEO Tim Sloan announces his retirement on March 28, 2019, in a conference call with Wells Fargo Chair Betsy Duke and interim CEO Allen Parker.
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Wells Fargo CEO Tim Sloan announces his retirement on March 28, 2019, in a conference call with Wells Fargo Chair Betsy Duke and interim CEO Allen Parker.

Wells Fargo said Tuesday it is selling a Charlotte-headquartered business that employs about 800 workers in the area — but it remains unclear what will happen to those jobs after the deal closes.

The San Francisco-based bank said it is selling its institutional retirement and trust business to Iowa-based Principal Financial Group. Principal said it expects to pay $1.2 billion in a purchase that might be finalized in the third quarter, once regulatory approvals are granted.

Principal said that it intends to maintain a presence in the Charlotte metro area, although it did not provide specifics.

The company will evaluate any potential redundancies of jobs in Charlotte, Principal spokeswoman Jane Slusark told the Observer. But it’s too soon to say what the final employee count will be, she said.

Among other things, the Wells unit administers retirement plans for 401(k) participants and pensioners of U.S companies. Employees in the unit work in various locations, including uptown and at Wells’ Customer Information Center on W.T. Harris Boulevard, Wells spokeswoman Amy Hyland Jones said.

The unit also has about 800 employees in Minnesota, which is another large hub, she said, in addition to other U.S. sites.

Across the Charlotte metro area, Wells Fargo employs about 26,000 people, its biggest employment hub.

In a statement, Renee Schaaf, president of retirement and income solutions at Principal, praised Charlotte for its quality of life and work force. “The metro area has become a major U.S. financial center which will enable us to continue to innovate and grow our business through access to top talent,” Schaaf said.

Latest Wells sale

The Iowa deal is the latest sale at Wells Fargo, which continues to shed businesses as it pushes to slash costs and recover from a series of scandals.

Those scandals include revelations in 2016 that employees had opened as many as 3.5 million bank and credit card accounts without customer permission to meet unrealistic sales goals.

Last month, Wells Fargo CEO Tim Sloan abruptly stepped down amid fallout from that disclosure and more recent instances of customer harm.

Among recent divestitures, the bank announced plans last year to sell 52 Midwestern branches to Michigan-based Flagstar Bancorp. In a separate deal last year, the bank completed the sale of its shareowner services business to U.K.-based Equiniti Group.

The institutional retirement and trust business unit is part of Wells Fargo’s wealth and investment management segment headed by New York-based Jon Weiss.

In a statement, Weiss said the sale reflects Wells’ strategy “to focus our resources on areas where we can grow and maximize opportunities within wealth, brokerage and asset management.”

The institutional retirement and trust business had $827 billion in assets under administration and about 2,500 employees as of Dec. 31, according to Principal, which is headquartered in Des Moines, Iowa. Those employees are based across the U.S., Philippines and India, Principal said.

Tuesday’s sale also comes as Wells Fargo looks to cut its total employment in the coming years.

Last year, the bank disclosed plans to trim employment by about 5 to 10 percent over the next three years, as part of a sweeping initiative to streamline the bank and make it more customer-focused.

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