Goldman Picks Up GE Capital's Deposits

GE announced this week that it would be selling GE Capital Bank's U.S. online deposit platform along with all deposits of GE Capital Bank to Goldman Sachs Bank USA, transferring approximately $16 billion of deposits to GS Bank. The transaction is subject to regulatory approval and relates only to the deposit platform and deposits of GE Capital Bank. GE expects to wind down the remaining operations of GE Capital Bank following closing of the transaction, subject to regulatory approval. Scott Roberts, president of GE Capital Bank, is expected to join Goldman's banking unit to oversee the platform, GE said.

"As we work to reduce the size and complexity of GE Capital, this transaction is another key step. It advances GE Capital's new strategic direction by facilitating closure of one of our two U.S. bank charters, which we believe will help us become less systemically important," said Keith Sherin, GE Capital chairman and CEO. "I am confident that under GS Bank our deposit customers will continue to receive the high level of service and commitment they have come to expect," he added. GE announced in June that it would effectively break up its finance arm in order to avoid the added scrutiny that comes with being one of the non-bank firms that regulators oversee as if it were a mega bank.

"This transaction achieves greater funding diversification and strengthens the liquidity profile of GS Bank by providing an additional deposit-gathering channel," Liz Beshel Robinson, Goldman Sachs's treasurer, said in a statement. That funding objective is the establishment of an online consumer lending platform, and follows Goldman's hiring this past spring of Harit Talwar, formerly with Discover Financial Services. "Sluggish markets and new regulations have diminished historically profitable areas like trading, forcing Goldman and other Wall Street companies to hunt for new sources of revenue," the New York Times reported in June.

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