GE Mulls Polish Bank-Unit Sale as Finance Arm ShrinksRichard Clough
General Electric Co., which is in the process of shrinking its financial services arm, is exploring strategic options for its Polish banking unit including a possible sale.
GE hired investment banks and notified regulators that it is “analyzing options to sell” its 89 percent stake in Bank BPH SA, the Polish company said today in a filing. The advisers weren’t identified. The holding is valued at about $850 million (2.8 billion zloty) based on BPH’s closing price today.
A sale would further Chief Executive Officer Jeffrey Immelt’s plan to trim GE Capital and expand its high-margin industrial manufacturing operations. Fairfield, Connecticut-based GE held an initial public offering in July for its North American consumer-lending business, known as Synchrony Financial, as part of a plan to spin off the unit.
GE decided to “explore strategic options” for BPH as part of a strategy to reduce the share of earnings coming from its finance operations to 25 percent of the total, a spokeswoman, Susan Bishop, said in an e-mail.
“BPH is a well-run bank with a stable balance sheet and strong capital position,” she said. “The bank would be better positioned to realize its full potential if it was aligned with a company that had a strong commitment to its business plan and growth strategy.”
GE rose 0.7 percent to $24.28 at the close in New York. BPH was little changed at 41.21 zloty in Warsaw.
The company has sold stakes in foreign banks before, including a deal announced in June to divest GE Capital’s Nordic business. Banco Santander SA, Spain’s biggest bank, agreed to buy GE Money Bank AB, which operates in Sweden, Denmark and Norway, for about 700 million euros ($953 million).
Immelt said in an interview last week in New York that the Nordic bank sale would serve as a model as he looks for additional divestiture opportunities.
“We’re always looking for ways to make GE Capital smaller,” he said.
GE agreed in 2007 to buy BPH from UniCredit SpA to take advantage of economic growth in eastern Europe.
Polish financial markets supervisor KNF said in a statement that it pays “special attention” to the actions taken by majority shareholders to ensure that they are meeting obligations.
(An earlier version of this story was corrected because Bank BPH’s headquarters was incorrectly identified.)