GE announced this week that it had completed the sale of a $3.7 billion portfolio of loans from its UK home lending business to Kensington Mortgage Company Limited. The deal, GE's third loan portfolio sale this year, nearly halves the size of the company's UK home lending business to less than $7 billion, according to a Reuters report. While terms of the deal were not disclosed, the acquisition is a big gain for the mortgage company. Kensington Mortgage, which is controlled by Blackstone Tactical Opportunities and TPG Special Situations Partners, was previously sold to the joint venture by Investec Plc in September 2014, in an all-cash deal valued at about $290 million.
The sale is part of a plan to return to GE's industrial roots and sell most of finance-related assets, according to a CBS News report. "We are pleased with the progress we are making to reach and close agreements for our businesses and assets. The speed and value we have achieved is a testament to the hard work of our GE Capital teams around the world," said Keith Sherin, GE Capital chairman and CEO, in a press release. GE Capital once accounted for almost half of GE's profit. However, the unit's rising funding costs nearly sank the entire company during the 2008 financial crisis.
With the addition of the UK home lending portfolio, the total for GE Capital 2015 announced sales is approximately $90 billion. Earlier this month, BMO Financial Group agreed to acquire GE Capital's transportation finance business in the US and Canada, in a bid to expand its commercial banking business.
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