MetLife Inc. (MET) said GE Capital Financial Inc. will acquire
most of its U.S. retail deposit business as the insurance company
looks to end its stint as a bank holding company.
Financial terms of the deal, which is expected to close in the
second quarter, weren't disclosed.
MetLife, the largest life insurer in the U.S., said in July it
was exploring the sale of its banking operations to avoid new
federal regulations. MetLife's insurance operations are overseen by
state regulators. But given its overall size and its bank charter,
it was considered a leading candidate among insurers to be
designated as a "systemically important financial institution" and
face further scrutiny from the Federal Reserve and other
regulators.
The company joins Hartford Financial Services Group Inc. (HIG)
and Allstate Corp. (ALL) in shedding its bank operations in an
effort to avoid the added scrutiny that banks face under the
Dodd-Frank financial-overhaul law enacted last year. Still,
insurers without bank-holding companies can still become targets of
added federal oversight if selected as "nonbanks" that are
nonetheless deemed systemically important.
GE Capital, part of General Electric Co. (GE), will acquire
about $7.5 billion in MetLife Bank deposits, including certificates
of deposit and money market accounts, and an established online
banking platform.
"This acquisition fits with our plans to launch a U.S. deposit
platform," said Dan Henson, president and CEO of GE Capital -
Americas. "It accelerates our timing, helps us build a stronger and
more cost efficient funding base, and allows us to better serve our
middle market commercial customers."
Meanwhile, about $3 billion in custodial deposits associated
with MetLife's forward mortgage business and certain other deposits
aren't included in the deal but will be transferred out of MetLife
Bank over the next six months.
MetLife Bank had $10.7 billion in deposits as of Sept. 30.
MetLife Bank began operating in 2001 by offering retail savings
products via the Internet.
MetLife shares climbed 3.7% to $32.24 in light premarket
trading, while GE was off 6 cents at $18.17
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356;
lauren.pollock@dowjones.com