Will MetLife and GE Benefit From This Purchase?
Though both MetLife (NYSE:MET) and General Electric (NYSE:GE) think the latter’s purchase of the former’s deposit business will strengthen their businesses and financial positions, investors haven’t yet swallowed that pill, to look at their share prices today.
As MetLife’s primary focus is on insurance and employee benefit operations, it was not crucial for MetLife to have business in retail banking and perhaps even useful to have the company de-registered as a bank holding company. MetLife’s Steven Kandarian emphasized the importance of exiting retail banking as it will allow more strategic focus on insurance and employee benefits.
MetLife’s garbage is GE’s treasure. For GE, the purchase of MetLife’s deposit business means $6.4 billion in bank deposits and less dependence on borrowing for GE Capital’s finance unit. The funding that will now be available to GE Capital will help with its lending business…