* MetLife starts do deregister as bank holding company
* Regulatory review prolonged deal
* Helps GE with funding alternatives
Jan 14 MetLife Inc has closed the sale
of its deposit-taking business to General Electric Co, a
move that allows the largest U.S. life insurer to start the
process of dropping registration as a bank holding company.
For GE, the deal will allow its GE Capital unit to rely
less on borrowing by providing it with an alternative source of
funding for its lending.
The deal, in which GE will take on about $6.4 billion in
bank deposits had been in the works for more than a year, with
regulatory review the main reason for the delay.
MetLife is not disclosing any other financial terms, said
MetLife spokesman Chris Breslin.
"This is really good news for MetLife," said Vincent Lui, an
equity analyst for Morningstar. "It's one last hurdle they need
to clear in order to exit itself from a bank holding company
As a bank holding company, MetLife was subject to oversight
by the Federal Reserve. In March the insurer failed a stress
test and was blocked by the Fed from raising dividends or buying
New York-based MetLife said the deal reflected its desire to
focus on insurance and employee benefits. It said it has started
the process of deregistering as a bank holding company.
The two companies in September tweaked the deal structure to
make it subject to the approval of the Office of the Comptroller
of the Currency, rather than the Federal Deposit Insurance Corp,
and won approval in mid-December.
Fairfield, Connecticut-based GE reached the deal to buy the
deposit-taking unit in December 2011, with an eye toward making
its GE Capital finance unit less dependent on borrowing.
With the deposit sale closed, investors will scrutinize
MetLife's fourth-quarter earnings report, expected in
mid-February, for insights on whether a U.S. government panel
will tag the company as a systemically important financial
institution, or SIFI.
"If it's considered a SIFI, there's more regulation," said
Morningstar's Lui. "We might find out more about that in the
MetLife will likely not resume share buybacks until it
"receives clarity on the implications of a non-bank SIFI
designation," according to a Barclays equity research note to
Shares of MetLife were down 36 cents, or 0.4 percent, to
$35.98 in early afternoon trading, while GE shares slipped 7
cents, or 0.1 percent, to $21.11. The S&P 500 stock index was
also slightly down, by about 0.2 percent.