* BAC-Credomatic been on block since last year
* GE had to raise stake to 75 pct last year from 50 pct
* Business could be worth $1.5 bln (Adds background about unit, GE, bylines)
NEW YORK/BOSTON, June 7 (Reuters) - General Electricis trying to sell BAC-Credomatic GECF, its Latin American bank and credit card issuer, as it looks to pare back its global finance unit, sources familiar with the matter said on Monday.
The company has been looking at selling its investment in the business since last year, a source briefed on the matter said.
A second source said the business could fetch some $1.5 billion in the current market. GE paid about $500 million for the nearly 50 percent stake in BAC-Credomatic in 2005, according to a media report at the time.
Last year, GE had to increase its investment in the unit to 75 percent from the initial 49.99 percent stake due to contractual obligations, a move that added $9 billion to its balance sheet at a time when it was trying to cut back, rather than build up, its finance arm.
"GE Capital is looking across the entire portfolio right now with the goal of aligning assets," GE said, when asked about its plans for BAC-Credomatic.
The sources requested anonymity because GE's talks to sell the business are not public.
Founded in 1952, BAC International Bank has operations across Central America, including Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Credomatic is a debit and credit card issuer.
Since GE's investment, BAC-Credomatic has seen its assets more than double to $7.7 billion in 2009, while its loan portfolio surged to $5.2 billion in 2008 before shrinking last year amid the credit crisis.
It posted net income of $149 million last year, down sharply from $245 million in 2008.
GE officials have repeatedly said they allowed GE Capital -- which was the main drag on corporate earnings through the downturn -- to grow too large.
GE Capital proved to be the largest U.S. conglomerate's weak spot during the credit crunch and subsequent global recession, as its investments in commercial real estate and portfolio of home mortgages proved to be riskier bets than the company had expected.
Management of Fairfield, Connecticut-based GE has been scaling back the finance arm, focusing on four core areas: financing sales of GE-made equipment, lending money and leasing goods to businesses, offering some consumer financial services and investing in real estate on a smaller scale.
They aim to reduce its total ending net investment -- a measure of how much it needs to fund -- to about $440 billion by the end of 2012, down from $472 billion at the end of last year. (Reporting by Paritosh Bansal and Scott Malone; Additional reporting by Christian Plumb; Editing by Gary Hill and Sofina Mirza-Reid) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)
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