A northeastern life insurer has disclosed plans to sell roughly 70% of its retail banking deposits.
Metropolitan Life Insurance Company, New York (NYSE: MET), says it will sell $7.5 billion in retail banking deposits, including certificates of deposit and money market accounts, to General Electric Capital Corp., Stamford, Conn. The company notes it also transfer the remaining $3 billion in other deposits out of MetLife Bank over the next six months.
The $7.5 billion sale to GE is subject to approval by the Federal Reserve, following a review period that is expected to last between 4 and 6 months.
Commenting on the announcement, research firm Sanford C. Bernstein & Co., New York, says it regards the sale as “a positive development” and a “concrete step” taken to realize the company’s objective of leaving the retail banking business.
“MET remains on track to achieve its previously stated goal of ridding itself of bank holding company (BHC) status by mid-2012,” Bernstein Research says in a report on MetLife. “We feel that once MET is no longer a BHC and subject to Fed oversight, it will remove an important overhang and help ‘change the story’ for the stock. We continue to rate MET outperform.”
The research firm adds the transaction “is not expected” to impact MetLife’s 2012 earnings per share and return on earnings guidance presented on
December 5, as these figures have already factored in the sale of the depository businesses.