Hastening its exit from the
US retail banking market, MetLife is to sell the bulk of the
depository business of MetLife Bank to GE Capital. In addition,
MetLife has announced the closure of its forward residential
mortgage origination business which is housed in MetLife

Under the MetLife Bank sale
agreement, GE Capital will acquire $7.5bn in MetLife Bank deposits.
Excluded from the transaction are about $3bn in custodial deposits
associated with MetLife Bank’s forward mortgage business and
certain other deposits which appear to amount to only some

MetLife anticipates that it
will incur after tax costs of between $90m and $110m as a result of
the closure of its forward mortgage business. The insurer noted
that it will remain active in the reverse mortgage

The deal with GE Capital and
closure of the forward mortgage business are part of a strategy to
end MetLife’s status as a bank holding company, and the unwanted
Federal Reserve Board oversight that it brings. In the first nine
months of 2011, MetLife’s entire retail banking business, including
mortgages, represented less than 2% of its operating

The restrictive nature of
MetLife’s bank holding company status was vividly illustrated in
October 2011 when the Federal Reserve turned down an application by
the insurer to increase its annual dividend and resume buybacks of
its own shares.

MetLife president and CEO Steven A Kandarian has
emphasised that bank holding company status prevents MetLife from
operating on a “level regulatory playing field” with other