Even as General Electric works to continue shrinking its huge finance unit, the business continues to generate a profit and pay dividends to its parent.
GE Capital reported an 8 percent gain for its third quarter from the same time a year ago, with net earnings of $1.6 billion. And it paid out a $2.4 billion dividend to G.E., bringing its total payouts for the year to date to $5.4 billion.
Since the financial crisis, General Electric has been laboring to reduce its finance arm's size, hoping to reduce its dependence on a division that nearly capsized the industrial giant during the financial crisis. The goal has been to transform GE Capital from a volatile but once-high-flying dynamo into a more stable industrial lending business.
The unit reported a 5 percent decline in revenue for the quarter, as most of its business lines reported a dip. The only operations that reported growth were its real estate and energy financial services arms.
And while GE Capital reported a slight rise in overall asset size from the previous quarter, to $561.6 billion, its parent reported that its ending net investment in the division - which excludes cash and discontinued operations - was $425 billion. The company said that put its shrinkage plan ahead of schedule.
“We are focused on delivering our key commitments to investors including balanced double-digit earnings growth, strong organic growth, margin expansion, and returning cash from GE Capital to fund balanced capital allocation for our shareholders,†General Electric's chief executive, Jeffrey Immelt, said in a statement.
