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General Electric Capital Corp.'s Aug. 11 agreement to sell its U.S. health care financial services lending business to Capital One Financial Corp. for $9 billion may have attracted more attention given the amount of consideration involved, but another deal announced 48 hours later by the General Electric Co. unit could be of even greater significance to its ongoing transformation plan.
Goldman Sachs Group Inc. unit Goldman Sachs Bank USA agreed Aug. 13 to acquire the deposits and U.S. online deposit platform of Salt Lake City-based GE Capital Bank in a transaction that will facilitate the closure of one of GE Capital's two U.S. bank charters.
GE Capital plans to wind down the Utah-based bank's remaining operations following the deal's completion, subject to regulatory approval. Another transaction, GE Capital's pending split with Synchrony Financial, would effectively address the other outstanding bank charter.
"Coupled with the split off of Synchrony Financial, this transaction will facilitate our complete exit from U.S. banking operations, eliminate the exposure of the U.S. deposit insurance safety net to GE Capital and thereby significantly reduce our regulatory footprint in the United States as we work to pair a smaller GE Capital with GE's long-term industrial growth," said GE Capital Chairman and CEO Keith Sherin in a release. Draper, Utah-based Synchrony Bank will remain part of Synchrony Financial on a post-split basis.
SNL and FDIC archives show that GE Capital Bank was established in February 1993 as Everest National Financial. It underwent a name change to GE Capital Financial Inc. in September 1994...