GE, Santander Close $1.5B Business Swap

General Electric (GE Quote) on Thursday wrapped up a $1.5 billion deal with Banco Santander (STD Quote), swapping five consumer finance businesses across Western Europe in exchange for an Italian corporate bank.

The deal for Interbanca represents GE's belief in the potential for higher returns in commercial finance than in the consumer market, says Will Spiers, a GE spokesman in Europe.

"GE finds this an attractive way to reposition the portfolio -- shift from retail to commercial finance," Spiers wrote in a follow-up email. "We're open to more transactions of this nature."

Spiers added that GE did not believe it had sufficient scale to be successful in the longer term in the markets it exited, which include consumer finance businesses in Germany, Austria, Finland, credit card and auto finance in the U.K. and credit cards in Ireland.

Santander, on the other hand, believes it has a strong foothold in these markets, while Italy is not a strategic priority, according to spokesman Peter Greiff. Interbanca was one of several properties it picked up as part of its acquisition of ABN Amro with The Royal Bank of Scotland (RBS Quote) and Fortis Group in 2007.

Interbanca has more than 300 employees and 11 branches throughout Italy. It serves about 3,000 clients, mostly small and mid-sized companies.