Another day, another rumour. New Wachovia (WB) CEO Bob Steel may offload WB’s securities division, which consists of A.G. Edwards and Evergreen Mutual funds. Other supposed targets for the axe are the bank’s Northeast and Texas retail branches.
After an $8.9 billion loss in Q2, Steel pledged to sell “non-core” assets, promising a review to be completed in a few months. Given WB’s lack of scale in Texas and the Northeast, retail branches in those region might be good candidates for spinoffs. Bloomberg:
Steel is more likely to sell parts of the retail banking business, said Anton Schutz, president of Mendon Capital Advisors Corp. in Rochester, New York, which manages about $150 million in assets. Regions such as New York and Texas, where Wachovia doesn’t have major market share, could be carved off, he said…
Analysts think that Wachovia’s capital management arm could fetch up to $15 billion, which could provide a crucial cushion against further writedowns:
Wachovia’s capital management unit could fetch $10 billion to $15 billion, CreditSights Inc. analyst David Hendler said in a July 22 report, based on annualized earnings of about $1 billion.