AFP, New York :
General Electric announced Friday it would sell off most of its banking business to complete its refocus on heavy industry and infrastructure.
The US industrial giant said it would offload most of the $500 billion in assets of GE Capital over the next two years, including $26.5 billion worth of real estate immediately.
But GE will retain its aircraft leasing and energy and healthcare equipment finance operations, businesses closely tied to GE’s core industrial manufacturing operations.
And, after its share price has sagged for more than a decade, the company said the sale of GE Capital assets over the next two years could generate as much as $90 billion to be returned to investors via dividends and share buybacks.
The move was the latest and biggest step by Chief Executive Jeff Immelt to turn the 123-year-old company back to its roots of advanced industrial technology and manufacturing, after the once hugely profitable finance business dragged the company down in the 2008 crisis.
Immelt, who took over GE from predecessor Jack Welch in 2001, has been paring off non-industrial units since the crisis, including insurance, consumer finance, GE appliances, plastics, and NBC Universal, the media and entertainment company.
In a preview of Friday’s announcement, last July GE spun off via a public offering its retail finance and credit card business, Synchrony Financial.
GE Capital had been a big part of the company’s growth under Welch during the boom of the 1990s, but over the past decade has added less and less to GE’s bottom line, $2 billion last year out of $15.2 billion in earnings.
General Electric announced Friday it would sell off most of its banking business to complete its refocus on heavy industry and infrastructure.
The US industrial giant said it would offload most of the $500 billion in assets of GE Capital over the next two years, including $26.5 billion worth of real estate immediately.
But GE will retain its aircraft leasing and energy and healthcare equipment finance operations, businesses closely tied to GE’s core industrial manufacturing operations.
And, after its share price has sagged for more than a decade, the company said the sale of GE Capital assets over the next two years could generate as much as $90 billion to be returned to investors via dividends and share buybacks.
The move was the latest and biggest step by Chief Executive Jeff Immelt to turn the 123-year-old company back to its roots of advanced industrial technology and manufacturing, after the once hugely profitable finance business dragged the company down in the 2008 crisis.
Immelt, who took over GE from predecessor Jack Welch in 2001, has been paring off non-industrial units since the crisis, including insurance, consumer finance, GE appliances, plastics, and NBC Universal, the media and entertainment company.
In a preview of Friday’s announcement, last July GE spun off via a public offering its retail finance and credit card business, Synchrony Financial.
GE Capital had been a big part of the company’s growth under Welch during the boom of the 1990s, but over the past decade has added less and less to GE’s bottom line, $2 billion last year out of $15.2 billion in earnings.
