GE to Exit the Bulk of GE Capital
Back to the core
General Electric Co. has decided it no longer needs to be a bank.
In the conglomerate’s most significant strategic move in years, GE has resolved to part ways with the bulk of GE Capital, the giant finance business that long accounted for around half the company’s profits but whose risks have rattled investors and weighed on its stock.
GE said it will hang on to its aircraft leasing operations, as well as financing for the energy and health-care industries—smaller lending lines that support its core industrial operations. But the bulk of the $500 billion behemoth will be sold or spun off over the next two years, as the company concludes the benefits aren’t worth bearing the regulatory burdens and investor discontent.
To punctuate its intentions, the company has agreed to sell $26.5 billion worth of office buildings and commercial real estate debt to Blackstone Group LP, Wells Fargo & Co. and other buyers. That follows plans to spin off its private label credit cards and retail finance businesses as a separate company called Synchrony Financial.