General Electric Co. GE +0.12% is preparing to spin off one of
its most important financial assets—the unit that issues store credit cards for
55 million Americans—as it retreats from one of the high-growth businesses that
defined the modern conglomerate.
The
decision to divest the business, amid concerns about the company's exposure to
banking, marks an important moment in the evolution of GE and the country's
three-decade long consumer credit boom. GE Capital expanded to the point that
its portfolio of loans and other assets now would rank it as the country's
fifth-largest commercial bank.
Preliminary
work to separate the business through an initial public offering is under way,
according to people familiar with the matter.
GE
has said the U.S. consumer-finance business earned $2.2 billion last year. The
operation accounts for about $50 billion of the $274 billion in loans
outstanding by GE Capital.
