GE Sheds Another Finance Asset in $9B Deal

The sale of GE's healthcare lending unit to Capital One Financial brings its announced divestitures of finance assets to about $78 billion.
Matthew HellerAugust 12, 2015

Continuing the dismantling of its finance business, General Electric has agreed to sell its healthcare lending unit and related loans to Capital One Financial Corp. for about $9 billion.

The sale, expected to close in the fourth quarter, will take GE’s announced divestitures of finance assets to about $78 billion. It has set a target of shedding about $100 billion worth of finance assets by the end of this year.

“We are on track to reduce our ending net investment by $100 billion by the end of 2015 and expect to be substantially done with our exit strategy by the end of 2016,” said Keith Sherin, CEO executive of GE Capital, the company’s financial-services unit.

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As The Wall Street Journal reports, GE has been under pressure from investors to ”return to its industrial roots amid a wave of federal regulations and changing market conditions that have weighed on returns.”

For Capital One, the deal will increase the credit card lender’s presence in the booming healthcare industry.

“This addition will catapult us to a leading market position in providing financial services to the healthcare sector,” said Michael Slocum, president of Capital One’s Commercial Bank.

The GE unit lends money to financial companies, investors and developers across the healthcare industry. It provided more than $10.5 billion in financing for acquisitions, refinancings, working capital and other purposes in 2014, according to its website.

GE also said it agreed to sell about $600 million of the unit’s real estate equity investments to another buyer, which it did not name.

Capital One has transformed itself in recent years into a full provider of banking and lending services. With more than $200 billion in deposits and $310 billion in assets, it is one of the nation’s largest banks.

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