GE Capital Receives Approval for Rescission of Status as Systemically Important Financial Institution

  • 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

FAIRFIELD, Conn.--()--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.

Contacts

Investors:
Matt Cribbins, +1 203-373-2424
matthewg.cribbins@ge.com
or
Media:
GE:
Susan Bishop, +1 203-253-2735
susan.bishop@ge.com
or
GE Capital:
Amrita Mainthia, +1 203-970-8253
amrita.mainthia@ge.com

Contacts

Investors:
Matt Cribbins, +1 203-373-2424
matthewg.cribbins@ge.com
or
Media:
GE:
Susan Bishop, +1 203-253-2735
susan.bishop@ge.com
or
GE Capital:
Amrita Mainthia, +1 203-970-8253
amrita.mainthia@ge.com