GE to pay $1.7 bln to Japan's Shinsei to end refund obligations
Feb 26 (Reuters) - General Electric Co said it would pay $1.7 billion to Japan's Shinsei Bank Ltd to end exposure to interest repayment claims related to the sale of its Japanese consumer loan business to the bank in 2008.
GE said on Wednesday the deal would reduce fourth-quarter and 2013 earnings by $1 billion and earnings per share by 9 cents. Operating earnings remain unchanged and the agreement will not impact first-quarter or 2014 results, GE said.
GE reported a fourth-quarter net profit of $4.2 billion, or 41 cents per share. Adjusted profit was 53 cents per share.
Shinsei said the agreement was not expected to have any impact on its earnings.
GE sold its Japanese consumer finance business to Shinsei for $5.4 billion after the government passed a law cutting maximum interest rates and ordered lenders to repay charges on outstanding loans that were deemed to have breached the limit.
General Electric Capital Corp (GECC) and Shinsei had agreed to a loss-sharing arrangement for potential claims on loans with interest rates of 20-29 percent, with a buyout option to end the obligation in the first quarter of 2014.
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