Diversified conglomerate General Electric Co.'s (GE) Chief Financial Officer Keith Sherin is poised to take over as CEO of GE Capital, the company's financial services arm, the Wall Street Journal reported Friday.
According to the WSJ report, the move will put a veteran executive in charge of GE Capital as it prepares to face greater regulatory oversight.
Sherin, aged 54, is reportedly expected to replace Micheal Neal as chief executive of GE Capital as early as this summer. Sherin is expected to be succeeded as GE's CFO by Jeff Bornstein, who is currently CFO at GE Capital.
GE Capital is one of the five major units of GE and provides commercial lending and leasing, as well as a range of financial services for health care, media, communications, entertainment, consumers, real estate, and aviation. However, investors have been pressing GE to shrink GE Capital in the wake of the financial crisis, and instead focus on expanding the company's industrial businesses.
GE'S CEO Jeffrey Immelt has shrunk GE Capital by about one-third, but the unit still accounted for about 46 percent of GE's earnings from continuing operations last year. Immelt has pledged to further reduce the size of the financing business by selling or spinning off more assets.
In late May, GE said that GE Capital has approved $6.5 billion in dividends to the parent company for fiscal 2013. GE Capital also plans $4.5 billion in special dividends to GE in the year, subject to approvals. At that time, Immelt noted that the announcement was consistent with the company's goal to reduce the overall size of GE Capital and return significant cash to GE.
The WSJ reported that GE Capital by itself would be the country's fifth-largest commercial bank, with nearly $530 billion in assets. The unit came under the tighter regulatory oversight of the Federal Reserve two years ago. Earlier this week, U.S. financial regulators proposed labeling GE Capital as "systemically important," a step that would bring tougher capital and liquidity requirements.
Sherin joined GE in 1981 and became the company's CFO in 1998, when his predecessor, Dennis Dammerman, took over GE Capital from Gary Wendt. Sherin has worked in GE's aviation and plastics businesses and was made a vice chairman in 2007.
Bornstein, aged 47, joined GE in 1989 and has worked in other GE divisions like aircraft engine services and plastics.
GE closed Friday's regular trading session at $23.86, up $0.48 or 2.05 percent on a volume of 49.04 million shares.
by RTT Staff Writer
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