General Electric has announced plans to sell the bulk of its £340bn ($500bn) financial arm GE Capital over the next two years.
In the statement issued to the New York Stock Exchange last Friday, chief executive Jeff Immelt said the sale would help GE focus on its core industrials – aviation, healthcare, oil and gas and transportation.
A GE spokesman in the UK said: “We will seek opportunities to transfer employees to buyers and we anticipate being able to sell to buyers who are fully committed to financial services.” These could be challenger banks or newcomers seeking to get a foot up in the UK lending market.
He said it was a complicated strategic change that would take around two years to complete, and that GE Money, one of the UK’s largest home lenders, would be part of any sale process.
“It is important to note this will be a sale not a closure,” he said, and added that it was too early to know the effect on employees.
GE Money has provided first-time buyer, self-employed, purchase and remortgage products to those having difficulty arranging a mortgage through a high street lender.
A spokesman for the Durham-based challenger bank Atom, which is looking to raise £75m as it hopes to gain its full licence and launch this year, said it would not be looking to buy GE Capital.
“Too many legacies,” the spokesman said. “We want a nice clean start and its brand does not suit us.”
Alex Reynolds, financial adviser at London-based Advies Private Clients, said: “It depends who the buyers are and their intentions. GE is a good lender, with a mortgage book, and an attractive proposition because of the client base. However, it is still niche so you have to think who will come in and buy it.
“While you do not want to see a lender leaving the market, there are enough lenders and good new entrants to adequately fill the gap they leave.”