GE expects to close on sale of Japanese consumer business
GE said in a filing with the U.S. Securities and Exchange Commission that it recorded an after-tax loss of $908 million last year in connection with the sale of GE Consumer Finance Co., known as Lake.
The loss represents the difference between the value of the business and its projected sale.
The industrial, finance and media conglomerate sold the business because Japanese regulatory limits on interest charges on unsecured personal loans "did not permit us to earn an acceptable return," GE said.
Citing continued pressure on the subprime mortgage industry, GE also said Wednesday it closed on the sale of its U.S. mortgage business in December for $117 million in cash. GE took an after-tax loss of $62 million on the sale for 2007.
GE announced its exit from the subprime mortgage business in July.
GE said then it dumped $3.7 billion of its subprime mortgage portfolio. GE sold most of the assets in December and retains a small portfolio on the books, a spokesman said.
GE also said in the filing that delinquency rates at GE Money increased in 2007, "primarily as a result of the deteriorating consumer credit environment in the U.S."
Chief executive Jeff Immelt told analysts in December that GE may consider different ways to run GE Money.
GE shares closed at $34.36, up 8 cents.
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