Banking and financial services company Wells Fargo could purchase a specialty finance portfolio of General Electric worth more than $30bn (£19.6bn,€26.4bn) to add more interest-bearing assets to its already large lending portfolio. Wells Fargo outbid several others and is poised to bag the portfolio.
The GE portfolio consists of vendor financing, commercial distribution finance and direct lending assets, according to Reuters. John Shrewsberry, CFO at Wells Fargo, had in July stated that certain portions of GE's commercial loans and leases portfolio would "fit nicely" with its business.
Since GE began selling its finance assets earlier this year, Wells Fargo has agreed to purchase GE's railcar leasing business and bought a portion of GE's commercial real estate loans worth $9bn. The deal is in an advanced stage and could be announced before Wells Fargo publishes its third-quarter earnings on Wednesday, 14 October.
GE had a target of shedding $100bn worth of finance assets by the end of 2015 and this deal would be a step in that direction. It recently revealed its latest divestment agreement for its North American corporate aircraft financing portfolio that brings GE Capital's total deals till date to $97bn. In April, the American conglomerate announced plans to sell about $200bn in GE Capital's financing assets aiming to focus more on its industrial goods manufacturing vertical, resulting in a series of transactions.
The commercial distribution finance business of GE Capital offers loans to manufacturers and dealers of durable goods such as off-road vehicles, boats and recreational vehicles. While its direct lending arm offers asset-based loans and equipment leasing to a range of mid-sized and larger companies, its vendor finance arm allows equipment dealers with larger networks to offer third-party financing to buyers of office imaging, construction, material handling and technology apart from other equipment.