General Electric Company (NYSE: GE) stated recently that the company has completed its sale of the US online deposit platform of the GE Capital Bank. Moreover, it has completed the transfer of all the US deposits of the bank to Goldman Sachs Bank USA. In pursuant to the agreement which was reached on the 13th of August last year, the conglomerate transferred about $16 billion of the deposits of the bank, while Goldman Sachs will now offer services to the accounts of the customers.
The deposits of the bank consist of brokered Certificates of Deposit and online savings account worth $8 billion, and another $8 billion of online Certificates of Deposit. The Chairman and CEO of GE Capital Bank Mr. Keith Sherin stated that the sale of the bank’s deposits will most likely allow the full exit of the company from the US banking system after it ends its US bank deed and axes its FDIC insurance. These steps are anticipated by the end of the present week. The GE Capital Bank Chairman and CEO further stated that the bank is satisfied with the transfer of the bank’s deposits to Goldman Sachs. In addition, the firm presumes that Goldman Sachs will be able to offer top quality services to its clients.
Mr. Keith Sherin pointed out that the deposit sale contract is a single step towards the goal of minimizing the size and complications at the GE Capital Bank. In addition, it also promotes the strategy of the bank to close one US bank charter. This is anticipated to make GE Capital become less systematically important.
Earlier, the company stated on March 31 this year that GE has filed a request about its SIFI rescission with the Financial Stability Oversight Council (FSOC). The filed request of GE validates that GE Capital has significantly condensed its risk portfolio, and is less consistent with the financial system of the United States. General Electric has provided a detailed description of the alterations that it has introduced since it was categorized as a SIFI back in 2013.
“We have completed over 80% of our projected asset reductions, exited leveraged lending and US consumer lending, exited nearly all middle market lending, reduced real estate debt by more than 75% and real estate equity by 100%, and reduced outstanding commercial paper almost 90%,” said the GE Capital Chairman CEO in the official press release.
General Electric intends to develop its high value industrial segments and being able to hold on to the financing verticals that are associated with its industrial businesses is a crucial part of this goal. Since the announcement of the deposit sale, General Electric has inked contract amounting to around $166 billion in ending net investment.
As of 9:20 AM GMT -4, the GE stock is changing hands at $31.07, down by 0.03 percent or 0.01. The company has a market capitalization of 288.77 billion, and its P/E ratio stands at 168.15. Furthermore, General Electric currently has a dividend yield of 2.96 percent.