The dismantling of General Electric's (NYSE:GE) once-mighty GE Capital financial services unit continues. The Federal Reserve has granted approval to Goldman Sachs (NYSE:GS) to buy GE Capital's online bank deposits, which total roughly $17 billion. The deal was originally agreed to last August; the terms of the purchase remain undisclosed.
The deposits will be absorbed by Goldman Sachs unit Goldman Sachs Bank. With them, Goldman Sachs Bank will hold approximately $95 billion in total deposits.
The Fed's approval of the sale is the latest development in General Electric's attempts to dismantle GE Capital. The company undertook this last April because of stricter regulations for what the Fed deems "systemically important" financial institutions.
The Fed's nod is the key approval needed to cement the deal. It is still, however, subject to approval from New York and Utah state regulators.
Does it matter?
Considering the entirety of the Goldman Sachs financial juggernaut, the GE Capital buy is a drop in the bucket -- at the end of last year, the company had a whale-like $861 billion in total assets.
Still, it's always encouraging when a bank widens its asset base, particularly when it scores a good deal in the process (we can assume this was the case, given the fire-sale nature of General Electric's divestment, and Goldman Sachs' strong deal-making abilities).
Some General Electric shareholders will be sorry to see the formerly powerful -- and very profitable -- GE Capital continue to melt away. But the company feels it's time to get out of the finance game, and shareholders should welcome this news as a sign it's moving right along with that process.