Wells Fargo Decides to Keep Its Private-Label Credit Card Unit
(Bloomberg) -- Wells Fargo & Co. is opting to keep its private-label credit card unit after reaching out to potential buyers last year, according to a person with knowledge of the matter.
The unit strikes agreements with retailers so that shoppers can buy merchandise such as jewelry, appliances and furniture on credit. Even after San Francisco-based Wells Fargo had started to reach out to possible bidders, the lender hadn’t made a final decision on a sale, people familiar with the talks said in November.
Chief Executive Officer Charlie Scharf, who took over in late 2019 with a mission of overhauling the bank after years of scandals, has conducted deep reviews of Wells Fargo’s businesses and promised to simplify the company. He said last month that the firm will sell off some units to improve Wells Fargo’s focus and listed asset management, corporate trust and rail as units on the chopping block. The firm also sold its $10 billion private student loan book in December.
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Spending on private-label credit cards slowed last year as many retailers were forced to temporarily shut their stores to stem the spread of the coronavirus, and consumers sought to pay down debt rather than make purchases. Even before the pandemic, Wells Fargo didn’t rank among the top five firms in the space, according to Nilson Report, which tracks the industry.
A Wells Fargo spokesperson declined to comment on the deliberations.
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