General Electric (GE) 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), Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (JPM). 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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV