Report: GE Capital to Drop Consumer Finance Unit
Big risks in consumer finance come with big rewards, but General Electric (NYSE:GE) will focus on other aspects of its business in the future. According to The Wall Street Journal, sources inside the company say GE will sell off the consumer lending division of GE Capital, the unit responsible for store credit cards for big box retailers and online purchases alike.
The WSJ report indicates GE is preparing an IPO of these enormous assets, though a sale of the entire business is unlikely due to pressure from federal regulators. Its earnings amounted to $2.2 billion in 2013 alone. Reports in late July showed GE was shrinking its finance business abroad, but the decision to sell off credit cards for stores like Amazon.com (NASDAQ:AMZN) and The Gap (NYSE:GPS) is on an entirely different level.
The announcement said to be forthcoming by the WSJ follows a number of events reflecting GE’s shift away from its finance business. Jeffrey Immelt, GE’s chief executive officer, has been saying the company wants to focus on its industrial and manufacturing business for the near future. The company’s exposure in the finance division became magnified during the financial crisis and nearly led to the downfall of General Electric.