General Electric (GE - Get Report) executives say they are not seeking an equity partner for the company's GE Capital unit -- a statement that is unlikely to quell growing speculation about an eventual partnership with a large bank.
"I don't know what the scenario would be where we would entertain that," said CFO Keith Sherin, while GE Capital boss Mike Neal added, "I'm not focused on that. I don't think anybody here is."
The statements came in response to a question from Deutsche Bank analyst Nigel Coe during a conference call Tuesday where executives gave investors a detailed look at GE Capital. Many GE watchers are concerned the unit is painting too rosy a picture of its loan portfolio, and will be unable to adjust to a tougher new regulatory environment without looking much more like a bank. Analysts including Sterne Agee's Nick Heymann have said they expect GE to eventually partner with a large bank such as HSBC Holdings (HBC).
Also on Tuesday, GE executives projected losses for 2010 will be similar to those it is projecting for 2009 -- a more favorable scenario than many analysts are predicting.GE has raised suspicions among investors and analysts as it has reported relatively small losses in areas like real estate and consumer lending that have stung banks like Citigroup (C - Get Report), Bank of America (BAC - Get Report), JPMorgan Chase (JPM - Get Report) and Wells Fargo (JPM - Get Report). GE has said this is because it has more conservative underwriting standards. Also, it says it does not plan to sell many of the loans it has on its books, so current market prices are irrelevant.