GE to Spin Off Retail Finance Unit as ‘Synchrony Financial’

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General Electric Co.’s (NYSE:GE) credit card business filed for an initial public offering on Thursday, marking the first step in the company’s plan to exit retail finance, Reuters reports.

The company, GE Capital, which counts businesses like Wal-Mart and Gap among its customers, will operate instead under the name Synchrony Financial. Bankers estimate the company could be worth as much as $16-18 billion. The company is the largest provider of private label credit cards in the United States, based on purchase volume, and has more than 62 million active accounts, according to Reuters.

The move is part of a long-anticipated plan to downsize GE Capital, which at one point brought in a little under half of General Electric’s revenues; the company wants to reduce it’s dependency on the consumer lending business, limiting it’s financial arm to 30 percent of earnings.

The plan to spin off the business arose after the financial crisis when the unit ran into some trouble due to its huge holdings in commercial loans and risky home loans it had acquired through a subprime lender it purchased, the New York Times reports.

G.E. shares plummeted following the collapse of the Lehman Brothers, generating concerns about whether the company would be able to support it’s financial business.

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