In a meeting with investors this week, 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 today.
Steel said the sale of assets and businesses would likely be in the hundreds of millions of dollars, not billions, as the company looks to shore up its capital base, Sandler O'Neill + Partners analyst Kevin Fitzsimmons, who attended the meeting, wrote in a report.
Steel confirmed that he considers retail/commercial banking, corporate and investment banking and brokerage as core to the company, Sandler wrote. He also said Wachovia has a “long-term ambition for asset management,” appearing to scuttle talk of a sale of Wachovia's Evergreen investments.
As for insurance, management said it likes the business but acknowledged “certain attributes make it saleable,” according to the report. The business is operated relatively separate from the bank, isn't a huge contributor to revenues and could be sold for a good price, Fitzsimmons wrote.
The Observer reported on Wednesday that the insurance business could be a possible candidate for sale.
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, according to Business Insurance magazine. It trailed far behind No. 1 Marsh & McLennan Cos. Inc., which tallied $5.5 billion in revenue.