DealBook: MetLife to Sell Bank Unit to GE Capital

Hiroko Masuike/The New York TimesMetLife headquarters in Manhattan.

MetLife announced on Tuesday that it has agreed sell the bulk of its retail deposits business to GE Capital, as it seeks to trim its operations and focus on its core insurance business.

Under the terms of the deal, GE Capital will acquire about $7.5 billion of MetLife’s deposits. The rest, about $3 billion in deposits, will be transferred over the next six months, MetLife said in a statement.

MetLife is swiftly dismantling its banking business, in a bid to ward off increased regulatory oversight. Although its deposit business, founded in 2001, has always been a small sliver of the business — representing just two percent — it was large enough to classify MetLife as a bank holding company. The status subjected MetLife to additional rules and increased scrutiny by federal regulators.

As part of similar efforts, other large insurers have also shed their deposits, including Allstate, which agreed in February to sell about $1.1 billion in deposits to Discover Financial.

“We do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions,” Steven A. Kandarian, MetLife’s chief executive, said in July, when MetLife first announced it was considering a sale of its depository business.

Mannie Garcia/Bloomberg NewsSteven Kandarian, chief of MetLife, testified at House panel in 2009.

Shares of MetLife opened higher on Tuesday, rising nearly 2 percent to open at $31.60.

MetLife’s sale comes amid increasing tension between the firm and its federal regulators. Last month, the Federal Reserve rejected a plan by MetLife to raise its dividend, barring the firm from increasing its payout until the next round of stress tests.

MetLife hired Deutsche Bank Securities as its financial adviser and law firm Wachtell, Lipton, Rosen Katz as its legal adviser for the transaction.

The deal is expected to close by the second quarter of next year.

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