According to Reuters General Electric Co jumped into the retail deposits business on Tuesday, buying the online bank from life insurer MetLife Inc in a deal that will let GE's capital arm expand its funding base and lessen reliance on wholesale markets.
The speed of the move took some analysts by surprise, as it has only been three weeks since GE said it wanted to start taking bank deposits from consumers. In the wake of the financial crisis, during which GE had to seek a lifeline from Warren Buffett, GE Capital has been trying to diversify its funding base so that it is not so dependent on commercial paper and bond sales.
"This acquisition gets GE Capital halfway to the stated (funding) goal, much faster than consensus expectations," Sterne Agee analyst Ben Elias said in a research note.
GE Capital is taking on about $7.5 billion in deposits -- just enough to put it in the top 100 banks nationwide, roughly. It tipped its hand clearly earlier this month, when a top executive said the company needed a U.S. retail channel next year….
Read more at http://www.reuters.com/article/2011/12/27/us-metlife-gecapital-idUSTRE7BQ0MR20111227
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