(Adds context on divestments by Wells Fargo)
March 24 (Reuters) - Wells Fargo on Wednesday said it will sell its corporate trust business to Australia’s Computershare Ltd for $750 million, the latest move to unload assets and focus on main divisions since top boss Charles Scharf joined the bank in 2019.
The sale is in line with steps taken by Scharf to turn Wells Fargo around by cutting costs and shedding noncore businesses, following a years-old sales practices scandal
San Francisco-based Wells Fargo last month agreed to sell its asset management business to private equity firms GTCR LLC and Reverence Capital Partners for $2.1 billion.
It has also announced deals to sell its private student loan portfolio and its Canadian direct equipment finance business.
As part of the deal announced on Wednesday, about 2,000 employees of Wells Fargo’s Corporate Trust Services (CTS) business will be transferred to Computershare, which offers investor services such as share registry.
“This transaction is consistent with Wells Fargo’s strategy of focusing on businesses that are core to our consumer and corporate clients,” said David Marks, head of commercial capital.
Wells Fargo’s CTS unit manages debt issues and offers indenture and escrow services among others.
To help fund the deal, Melbourne-based Computershare announced a A$835 million ($637.11 million) entitlement offer. The company expects the deal to add to its earnings per share by at least 15% on a full-year 2021 pro forma basis.
Wells Fargo’s CTS is also expected to generate a return of more than 15% on invested capital by fiscal 2025.
“It is a clear fit with our successful Canadian corporate trust operations and existing U.S. operations,” Computershare Chief Executive Stuart Irving said.
The Australian company also expects to save $80 million, pre-tax annually over five years after the completion of the deal.
($1 = 1.3106 Australian dollars)
Reporting by Nikhil Subba, Soumyajit Saha and Noor Zainab Hussain in Bengaluru; Additional reporting by Nikhil Kurian Nainan; Editing by Matthew Lewis, Arun Koyyur and Bernard Orr