MetLife announced on Tuesday that it had agreed to sell the bulk of its retail bank deposits business to GE Capital, as it seeks to focus on its core insurance business.þþUnder the terms of the deal, GE Capital will acquire about $7.5 billion of MetLife’s deposits. The rest, about $3 billion in deposits, will be transferred over the next six months, MetLife said in a statement.þþMetLife is swiftly dismantling its banking business to ward off increased regulatory oversight. Although its deposit business, founded in 2001, has always been a small sliver of the company — representing just 2 percent — it was large enough to classify MetLife as a bank holding company. The status subjected MetLife to additional rules and increased scrutiny by federal regulators.þþAs part of similar efforts, other large insurers have also shed their deposits, including Allstate, which agreed in February to sell about $1.1 billion in deposits to Discover Financial.þþ“We do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions,” Steven A. Kandarian, MetLife’s chief executive, said in July, when MetLife first announced it was considering a sale of its depository business.þþShares of MetLife opened higher on Tuesday, but lost most of that gain during the day, closing at $31.20, 10 cents above Monday’s close.þþThe sale comes amid increasing tension between MetLife and its federal regulators. Last month, the Federal Reserve rejected a plan by MetLife to raise its dividend, barring the firm from increasing its payout until the next round of stress tests.þþMetLife hired Deutsche Bank Securities as its financial adviser, and Wachtell, Lipton, Rosen & Katz as its legal adviser on the transaction.þþThe deal is expected to close by the second quarter of next year.
Source: NY Times
