Wells Fargo bank is in talks to buy General Electric Co.’s $74 billion U.S. commercial lending and leasing operation, according to reports.
Wells Fargo, which reported $415 billion of commercial loan holdings last quarter, could beef up its commercial loan holdings with the purchase of all or part of GE’s U.S. commercial lending and leasing business, according to reports from Reuters and The Wall Street Journal, citing anonymous sources.
USA Today reported that the $74 billion GE unit provides loans to mid-sized companies, or those with between $10 million to $1 billion in annual revenues, such as restaurant franchises.
More than half, or 52%, of Wells Fargo’s $21.3 billion in sales last quarter came from loans. And its commercial lending business was one of the San Francisco bank’s faster growing loan segments, up 13% over the same quarter in 2014.
Wells Fargo spokeswoman Jen Hibbard declined to comment, as did Seth Martin, a spokesman for GE.
A sale of the GE commercial lending unit was expected as part of GE’s plan, announced on April 10, to significantly reduce its banking operations, a division known as GE Capital, by selling off $200 billion worth of assets in that division over the next two years.
The U.S. commercial lending and leasing unit, valued at $74 billion, marks the largest of the banking assets GE had tagged for sale when it made the announcement two weeks ago.
But reports of GE’s talks with Wells Fargo suggest the sale of its biggest planned divestiture could come quicker than expected.
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