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GE Capital to sell majority stake of Core Bank of Bank BPH in Poland to Alior Bank.

M2 EQUITYBITES-April 1, 2016-GE Capital to sell majority stake of Core Bank of Bank BPH in Poland to Alior Bank

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GE (NYSE:GE) on Friday announced an agreement to sell GE Capital's majority stake in Core Bank of Bank BPH (WSE:BPH) to Alior Bank (WSE:ALR).

Under this transaction, Bank BPH will be transformed into two separate operating units, the Core Bank and the Mortgage Bank, followed by the spin-off and demerger of the Core Bank into Alior Bank. The Core Bank will include the non-mortgage banking assets of Bank BPH and the employees associated with those businesses.

This transaction represents ending net investment (ENI) of approximately USD2.1bn as of Q4 2015 and is expected to release approximately USD0.2bn of capital to GE.

According to GE, it will retain USD3.9bn of mortgages (FX and local currency) in the Mortgage Bank unit and BPH TFI, the bank's asset management business.

Reportedly, GE is focusing on its high-value industrial businesses and is selling most GE Capital assets. GE will retain the financing verticals that relate directly to GE's industrial businesses.

Also, since the announcement in April 2015, GE Capital has signed agreements for approximately USD165bn and has closed approximately USD146bn of those. In total, GE plans to sell approximately USD200bn of GE Capital businesses worldwide and expects to be largely complete with the process by the end of 2016.

The large majority of Bank BPH's employees and branch network will join Alior Bank.

This transaction, which is expected to close in the fourth quarter of 2016, is subject to regulatory approvals from the Polish Financial Supervision Authority (PFSA), antitrust clearance, a rights issue by Alior Bank, and the demerger/spin-off of Bank BPH's Core Bank to Alior Bank.

GE, a Digital Industrial Company, is a provider of solutions in finance, healthcare, aviation, power, amongst others.

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Publication:M2 EquityBites (EQB)
Date:Apr 1, 2016
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