Goldman Sachs Bank USA, a wholly-owned subsidiary of Goldman Sachs Group, agreed to acquire the online deposit accounts and online deposit platform of GE Capital Bank. It would assume total expected deposits of around $16 billion.
According to Goldman Sachs Bank, the amount of GE Capital Banks’ online deposit accounts is around $8 billion. It would also assume GE Capital Bank’s brokered certificate of deposits worth $8 billion.
Goldman Sachs Bank said it would not acquire any financial asset in the transaction other than cash associated with the deposit liabilities. It includes management, employees, software, and technology used to operate the online deposit platform.
Under the terms of the transaction, Goldman Sachs Bank will offer employment to substantially all the employees of GE Capital Bank, who are dedicated to supporting the online deposit platform. The transaction is subject to regulatory approvals.
Reducing the size & complexity of GE Capital
GE Capital Chairman and CEO Keith Sherin said, “As we work to reduce the size and complexity of GE Capital, this transaction is another key step. It advances GE Capital’s new strategic direction by facilitating closure of one of our two U.S. Bank charters, which we believe will help us become less systemically important.”
Earlier this week, GE agreed to sell $8.5 billion of its healthcare-related loans and its Healthcare Financial Services (HFS) to Capita One for approximately $9 billion.
GE also agreed to sell around $600 million of HFS real estate equity investments to another buyer.
Transaction strengthens Goldman Sachs’s liquidity profile
In a statement, Goldman Sachs Group Treasures Liz Beshel Robinson said the transaction provides greater funding diversification and strengthens the liquidity profile of the bank.
“The establishment of this channel represents the advancement of a key funding objective for the firm,” added Robinson.
On the other hand, GE Capita Bank President Scott Roberts said, “We are pleased to transition our depositor relationships to GS Bank, a large, stable institution with a focus on customer service. I am personally excited at the prospect of joining GS Bank, along with my team, to work towards a seamless transition of depositor accounts and to assist in managing the platform going forward.”