General Electric Company (NYSE:GE) plans to spin off its consumer finance business, people familiar with the matter told Kate Linebaugh and Sharon Terlep of The Wall Street Journal. The consumer finance operations are managed by General Electric’s financial arm, GE Capital. Earlier in May, the Fairfield, Conn.-based company’s CEO Jeff Immelt said during a conference that the company is considering spinning off its consumer lending business to focus on its industrial operations.

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General Electric has already begun preliminary work for IPO

The loan portfolios and assets of GE Capital have grown so much that it would be among the top five commercial banks in the United States if considered a separate entity. The consumer lending arm of GE Capital issues store credit cards. The newspaper added that General Electric Company (NYSE:GE) is evaluating options like asset sales and smaller spin-offs. But the industrial conglomerate has already begun the preliminary work for an initial public offering.

General Electric Company (NYSE:GE) said that the consumer lending unit earned $2.2 billion in profits in 2012. It accounts for about 20% of GE Capital’s total loan portfolio of $274 billion. Sources said that an IPO is likely to take place in the first quarter of 2014. Selling the operation is a more straightforward option, but it would be difficult to find a buyer for such a large business. In addition, regulatory roadblocks prevent major financial institutions from doing big ticket deals.

General Electric CEO under pressure

The consumer lending unit generated hefty profits for General Electric Company (NYSE:GE) for years. But investors grew wary of the business as credit use slumped during the 2008 financial crisis. Moreover, Jeffrey Immelt is under immense pressure to ramp up General Electric Company (NYSE:GE)’s industrial operations. The stock has performed poorly, down 20.87% over the past decade. Immelt has pledged to boost the contribution of industrial operations to General Electric Company’s total revenues from 55% in 2012 to 65% by the end of 2015.

Jeff Immelt has positioned General Electric Company (NYSE:GE) as an industrial conglomerate focused on gas-fueled power generators, jet engines and locomotives. He has been selling off businesses that fall outside this core group. For example, General Electric has sold its entertainment unit NBC Universal, reinsurance business and plastics division.

General Electric Company (NYSE:GE) shares jumped 1.47% to $23.46 at 9:37 AM EDT.