The move will strengthen the bank’s liquidity profile and provide a stable, cheap source of funding, particularly as it reportedly considers venturing into the consumer lending business.
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But don’t just take our word for it…
Conglomerate General Electric Co (GE) on Thursday said it has agreed to sell GE Capital Bank’s U.S. online deposit platform to Goldman Sachs Bank USA (GS).
Sounds pretty useful to both sides.
Goldman said the transaction does not involve any financial assets, and real estate as the GE Capital Bank’s deposit platform is online only. Other terms of the deal, which is still subject to regulatory approval, were kept under wraps.
Now let’s try to make this sound sunny to the people who have loans from GE and are suddenly realizing they owe money Goldman Sachs now… It began transforming itself into a more conventional bank after the 2008 financial crisis pushed it to become a deposit-taking, bank-holding company regulated by the Federal Reserve.
Goldman Sachs BDC (NASDAQ:GSBD) last posted its quarterly earnings results on Thursday, August 6th.
GE is planning to wind up all its remaining banking operations of GE Capital Bank after this deal is completed.
The deal to acquire GE’s online deposits further positions Goldman as a mainstream bank.
As GE scales back its banking ambitions, it also plans to negotiate with regulators about withdrawing GE Capital’s designation of a systemically important financial institution in time.
GE announced in June that it would effectively break up its finance arm in order to avoid the added scrutiny that comes with being one of the non-bank firms that regulators oversee as if it were a mega bank. It has already sold $26.5 billion in real-estate assets, for example, to Wells Fargo bank and private equity firm Blackstone. The most bullish analyst sees the stock reaching 245 while the most conservative target is set at $175.
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On a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, The Securities and Exchange Commission has divulged that Schwartz Harvey M, (Executive Vice President – CFO) of Goldman Sachs Group Inc, had unloaded 33,326 shares at an average price of $211.3 in a transaction dated on July 17, 2015. The median estimate represents an 8.10% increase from the last price of $200.74.
