New | GE Capital CEO sees asset sales space accelerating in Q3

The head of General Electric Co’s finance unit said on Tuesday he expects the pace of GE Capital asset sales will accelerate in the third quarter as the US conglomerate eyes unloading an even bigger chunk of assets.

"We’re going to pick up the pace in the third quarter," GE Capital Chief Executive Keith Sherin told Reuters in an interview.

GE, which is shedding US$200 billion in finance assets to focus on industrial manufacturing, earlier on Tuesday announced the $2.2 billion sale of its European private equity financing business to Japan’s Sumitomo Mitsui Banking Corp. A day earlier, GE said it had agreements to shed its fleet management arm. A deal to sell its US private equity lending business was disclosed earlier in the month.

Analysts have said the finance asset sales have garnered high deal prices so far, but it remains to be seen if future sales will realise the same value and allow GE to reap more than the $35 billion in proceeds it has targeted for share buybacks.

A hefty portion of the businesses that have yet to be sold are part of GE’s North American commercial lending and leasing portfolio. Overall, GE’s North American units are "highly coveted," Sherin said.

"Globally, we have strong businesses but they’re not as strong as some of these North American franchises," he said.

All told, since April 10 GE Capital has announced asset sales totaling $23 billion in ending net investment, GE’s measure of assets that excludes non-interest bearing liabilities. With the most recent deals, GE hit a target of announcing $20 billion to $30 billion in asset sales during the second quarter.