Market Overview

Wells Fargo, Capital One And U.S. Bancorp Reportedly Interested In G.E. Capital Assets


According to a new report by Bloomberg, Wells Fargo & Co (NYSE: WFC), The Toronto-Dominion Bank (NYSE: TD), Capital One Financial Corp (NYSE: COF) and U.S. Bancorp (NYSE: USB) are among the parties interested in acquiring loan assets from General Electric Co (NYSE: GE)’s financial wing, G.E. Capital.

Bloomberg reports that the total assets up for grabs in G.E.'s latest round of selling total $40 billion and include direct corporate loans, inventory finance operations, and equipment leasing and transportation finance businesses.

Multiple Buyers Likely

While both Wells Fargo and Toronto Dominion have enough buying power to acquire the entire $40 billion in assets, Bloomberg’s sources indicate that neither will likely take on the entire $40 billion.

Related Link: Why Is GE Selling Most Of GE Capital, And Why Now?

Wells Fargo, which has already agreed to purchase about $9 billion of G.E. Capital’s commercial mortgage loans, is reportedly most interested in the equipment leasing and transportation finance businesses up for sale.

Scaling Back

The most recent wave of asset sales is a part of G.E.’s continuing initiative to wind down many of its finance-related activities. After the Financial Crisis scare dropped G.E.’s share price as low as $4.73 in 2009, angry shareholders began calling for the global conglomerate to ditch its risky non-core finance operations.

G.E.’s stock has since recovered to above $27 per share, but it continues to sell off finance assets as post-crisis regulatory pressures have made it increasingly difficult to profit in the financial services industry.

Everything Must Go

Nearly all of G.E. Capital’s $74 billion in commercial loan assets will eventually be sold. Earlier this week, Canada Pension Plan Investment Board agreed to buy G.E.’s Antares Capital for $12 billion.

Bids for the next wave of asset sales are expected to start coming in soon.

Disclosure: The author owns shares of Wells Fargo.


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Posted-In: News Rumors Asset Sales