TEXT-Fitch: MetLife continues its bank withdrawal
April 27 - Fitch Ratings believes MetLife's move to exit the reverse-mortgage business and the company's strategy to depart from the banking business via a shedding of its bank holding company units are line with our expectations. We believe the company's latest move has no ratings impact and no material impact on future stress testing results via the Federal Reserve. In a statement Thursday, MetLife said it is no longer accepting applications for reverse mortgages and has agreed to sell its reverse-mortgage servicing portfolio to Nationstar Mortgage LLC, subject to regulatory approval. The move will allow MetLife to emancipate itself from stringent government regulation regarding the use of capital. Without disclosing specific results of its reverse-mortgage portfolio, MetLife said its entire retail banking business represented less than 2% of its operating earnings for 2011, underscoring our view that financial impact will be immaterial as a function of the company's retreat from banking. The insurer had previously announced agreements to sell its deposit business to GE Capital and its warehouse finance business to EverBank. However, despite MetLife's continued strategic dismantling of its bank holding company structure, the insurer may once again be subject to government scrutiny regarding capital deployment when the Fed reveals later this year which non-banks are classified as systemically important financial institutions (SIFIs). We maintain our view that it is reasonable to expect MetLife may be designated as a SIFI based on Federal Reserve criteria, but note that final placement remains uncertain. Additional information is available on www.fitchratings.com. The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.
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