June 27, 2017 / 1:22 PM / 5 months ago

Wells Fargo to sell commercial insurance business

(Reuters) - Wells Fargo & Co (WFC.N) said on Tuesday it agreed to sell its commercial insurance business to private insurer USI Insurance Services, as the third-largest U.S. bank plans to focus on core banking products and services.

A Wells Fargo Bank is shown in Charlotte, North Carolina, U.S., September 26, 2016. REUTERS/Mike Blake

The financial terms of the deal, expected to close in the fourth quarter, were not disclosed by the companies.

The deal comes at a time when the bank is recovering from a sales scandal last year that damaged its reputation. Wells Fargo has doubled its cost-cutting target after expenses soared in the aftermath of the scandal.

The sales abuses in the bank’s branch banking operation led to a $190 million regulatory settlement, launches of other government probes, the firing of several bankers and the departure of CEO John Stumpf.

Wells Fargo plans to reduce expenses by another $2 billion through the end of 2019, on top of a $2 billion cost-cutting target the management previously announced.

The bank said on Tuesday its personal insurance business will report into consumer lending to serve retail customers.

Reporting by Diptendu Lahiri in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur

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