Principal Financial near Wells Fargo, Retirement Unit, Acquisition Source

(Reuters) – Principal Financial Group Inc. Is in advanced talks for the acquisition of Wells Fargo & Co's pension services business under a contract worth more than $ 1 billion, sources on the record said Sunday.

Wells Fargo is looking to streamline its operations against the fallout of the customer abuse scandal. The bank is banned from gaining ground after the US Federal Reserve imposed an unprecedented cap on its badets in February 2018, citing "widespread consumer abuse and insolvency." compliance. "

The bank's pension services unit, which includes the Wells 401 (k) savings account business, would develop a similar principal financial business. If the negotiations succeed, an agreement could be announced later this month, according to sources, who requested anonymity, as this information is confidential.

Wells Fargo and Principal Financial declined to comment.

Headquartered in Des Moines, Iowa, Principal Financial is a life insurance and financial services group with a market capitalization of $ 14.5 billion.

This is the latest in a series of divestments pursued by Wells Fargo.

In 2018, Wells Fargo announced the signing of contracts for the sale of 52 branches across Indiana, Michigan, Ohio and Wisconsin to Flagstar Bancorp Inc., as well as a contract to $ 1.7 billion to divest its Puerto Rico auto financing business to the local division of Popular Inc.

The disclosure three years ago that Wells Fargo had created millions of fake accounts had prompted the authorities to ask questions about mortgage foreclosures, auto insurance sales and wealth management, resulting in fines of billions of dollars.