GE Capital Receives Approval for Rescission of Status as Systemically Important Financial Institution
June 29 2016 - 9:10AM
Business Wire
- Reflects major transformation of GE
Capital to smaller, more focused firm
- GE Capital reconfirms $18 billion
dividend to parent in 2016; expects to deliver total dividends of
approximately $35 billion under Exit Plan
Today, GE (NYSE:GE) announced that it has received approval of
its request to the Financial Stability Oversight Council (FSOC) for
rescission of GE Capital’s designation as a nonbank Systemically
Important Financial Institution (SIFI).
The FSOC’s decision reflects the substantial reduction in GE
Capital’s size and risk profile and confirms that GE Capital does
not pose any threat to U.S. financial stability. GE’s request,
filed at the end of March 2016, detailed the changes and
dispositions GE Capital has made since being designated as a SIFI
in 2013 and, in particular, since GE announced in April 2015 that
it would become a more focused digital industrial company by
dramatically reducing the size of GE Capital.
“This decision is a result of the transformation of GE Capital
into a smaller, safer financial services company that meaningfully
contributes to the success of GE’s industrial businesses,” said GE
Capital Chairman and CEO Keith Sherin. “We will continue to
re-evaluate our capital requirements to reflect our reduced risk
profile and right size our organization as we go forward.”
“We have transformed GE by exiting most of financial services,
acquiring Alstom, and investing to be a leader in the Industrial
Internet,” said GE Chairman and CEO Jeff Immelt. “I am proud of the
tremendous execution of the GE Capital team. Going forward, GE
Capital will continue to be part of the “GE Store,” supporting the
growth of our Industrial businesses.”
With the rescission of its designation as a nonbank SIFI, GE
Capital’s activities will no longer be subject to the supervision
of the Federal Reserve or subject to the prudential standards set
forth in the Dodd Frank Act and its implementing regulations,
including minimum regulatory capital and liquidity requirements,
submission of annual resolution plans, and regulatory reporting
requirements.
“We are highly appreciative of the cooperative working
relationship we have had with the Federal Reserve and the FSOC and
their expeditious consideration of our SIFI rescission request,”
said Sherin.
GE Capital’s non-U.S. operations will remain subject to the
supervision of the U.K. Prudential Regulation Authority until GE
Capital’s international holding company no longer includes licensed
credit institutions, a process that GE Capital is targeting to
complete in the first half of 2017.
”We are rapidly shedding the remainder of our overseas assets
not aligned with GE and once complete we will go forward with a
business portfolio that is properly capitalized and directly
aligned with GE’s industrial businesses,” said Sherin.
Since the announcement in April, 2015, GE Capital has signed
agreements for the sale of approximately US$180 billion of
businesses and has closed approximately US$156 billion of those
transactions. GE Capital plans to have largely completed the
process of selling approximately $200 billion of GE Capital
businesses not linked to GE by the end of 2016. GE Capital expects
to deliver about $35 billion of dividends to GE under this plan and
remains on track to pay $18 billion of these dividends to GE in
2016.
About GE
GE (NYSE:GE) is the world’s Digital Industrial Company,
transforming industry with software-defined machines and solutions
that are connected, responsive and predictive. GE is organized
around a global exchange of knowledge, the "GE Store," through
which each business shares and accesses the same technology,
markets, structure and intellect. Each invention further fuels
innovation and application across our industrial sectors. With
people, services, technology and scale, GE delivers better outcomes
for customers by speaking the language of industry. www.ge.com
GE’s Investor Relations website at www.ge.com/investor and our
corporate blog at www.gereports.com, as well as GE’s Facebook page
and Twitter accounts, including @GE_Reports, contain a significant
amount of information about GE, including financial and other
information for investors. GE encourages investors to visit these
websites from time to time, as information is updated and new
information is posted.
Caution Concerning Forward-Looking Statements:
This document contains "forward-looking statements" – that is,
statements related to future events that by their nature address
matters that are, to different degrees, uncertain. For details on
the uncertainties that may cause our actual future results to be
materially different than those expressed in our forward-looking
statements, see
http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-looking-statements
as well as our annual reports on Form 10-K and quarterly reports on
Form 10-Q. We do not undertake to update our forward-looking
statements. This document also includes certain forward-looking
projected financial information that is based on current estimates
and forecasts. Actual results could differ materially.
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Investors:Matt Cribbins, +1
203-373-2424matthewg.cribbins@ge.comorMedia:GE:Susan Bishop,
+1 203-253-2735susan.bishop@ge.comorGE Capital:Amrita Mainthia, +1
203-970-8253amrita.mainthia@ge.com
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