GE Capital, the financial services arm of General Electric, has offloaded $1.5bn worth portfolio of healthcare equipment leases and loans to TIAA Bank.
The portfolio, which represents the Healthcare Equipment Finance (HEF) business of GE Capital, is expected to significantly expand the commercial banking business of the Florida-based TIAA Bank.
Besides, the sale will boost the ability of the financial services organization to provide a full range of financial solutions to institutional clients while serving more number of healthcare providers.
GE Capital has undertaken the sale of the Healthcare Equipment Finance business as part of its strategy to reduce its size and increase its overall focus.
In addition to the transfer of the portfolio, GE Capital and TIAA Bank have reached a five-year vendor financing agreement for the US customers of GE Healthcare.
GE Capital industrial finance president and CEO Trevor Schauenberg said: “TIAA Bank is a well-known, highly respected institution and we look forward to working with its outstanding team, ensuring a strong foundation for the future and seamless continuity of service for our U.S. customers.
“With this portfolio sale and financing alliance, we are expanding our funding capability and improving our competitive offerings for our customers.”
As part of the acquisition, TIAA Bank adds loans and leases provided by the former GE Capital business to about 1,100 hospitals and 3,600 physician practices and diagnostic and imaging centers across the US.
Some of the assets financed by the healthcare equipment financing portfolio are imaging, monitoring, ultrasound, respiratory, surgical and lab equipment.
As per the terms of the deal, the leadership, infrastructure and salesforce of the former GE Capital business will be integrated into GE Healthcare in 2019. The team will also continue to originate and service transactions under a co-branding arrangement with TIAA Bank.
TIAA Bank chairman and CEO and TIAA retail financial services CEO Blake Wilson said: “This agreement with GE Capital supports our long-term asset growth plan and provides scale and portfolio diversification while significantly expanding our on-going relationship with GE, a top-tier healthcare equipment manufacturer.
“The healthcare industry is dynamic and ever-changing, and the need for new healthcare equipment continues to grow at a rapid pace. This deal will allow TIAA Bank and GE’s healthcare finance business to continue to help clients with their financing needs for years to come.”