Wells Fargo has appetite for more GE Capital assets: Reuters

(Reuters) — Wells Fargo & Co (WFC.N) said Tuesday it is looking at more financial assets being unloaded by General Electric’s (GE.N) GE Capital unit after it bought $9 billion of real estate loans from the conglomerate.

Portions of GE’s $74 billion Commercial Loans and Leases portfolio that are up for sale now “fit nicely with the businesses at Wells Fargo,” CFO John Shrewsberry said in an interview following the bank’s second quarter earnings report Tuesday.

Shrewsberry also singled out GE’s railcar leasing business, saying it might complement Wells Fargo’s railcar leasing division, First Union Rail. “There’s a possibility that some portion of that makes sense for Wells Fargo,” he said.

The bank’s interest in GE Capital’s commercial loan and leases has been reported by Reuters and other media outlets, but Tuesday was the first time that bank executives confirmed their involvement on the record.

Even if the bank does not win these assets, it may finance the winners’ purchases, he added. Wells Fargo bought $9 billion of commercial real estate loans from GE Capital in the second quarter, and provided $4 billion of financing to Blackstone, which also bought a portfolio of the loans.

Other GE assets that have not yet been put formally on the block may also be of interest, Shrewsberry said. He declined to name other specific assets.

In April, GE announced the sale of some $200 billion in GE Capital assets as it moves away from finance and focuses on its industrial businesses.

In a call with analysts on Tuesday, Shrewsberry said Wells Fargo might slow down on returning capital to shareholders through moves like share buybacks if it saw the right opportunity to buy good assets.

While Wells Fargo looks at potential acquisitions, CEO John Stumpf made clear on the analyst call that bidding on assets is not the bank’s biggest priority now.

“We love this opportunity to do the GE thing, but organic growth is still the main part of the way we grow,” he said.

A GE spokeswoman declined to comment.