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
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.
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expressed are those of Fitch Ratings.