MetLife (MET) has another three months to tell regulators about its capital plans while it tries to sells its online bank to General Electric (GE).
The Federal Reserve gave the global life insurer until Jan. 5 to show it can handle severe economic stress, the company said in a regulatory filing Monday. MetLife had until Sunday to file a revised plan, a deadline that itself represented an earlier reprieve by the Fed, which sought the information initially by June.
The extension comes as MetLife tries to win approval from the Office of the Comptroller of the Currency to sell roughly $7 billion in deposits to GE. The deal would enable MetLife to leave the banking business, a push that took on added urgency in March after MetLife became one of four deposit-taking institutions to fail a Fed stress test.
The setback prevented MetLife from raising its dividend or buying back shares until it can demonstrate to the Fed's satisfaction how the company would handle such conditions as U.S. unemployment in excess of 13% or a contraction in gross domestic product to minus 8%. The depository business represented about 2% of MetLife's operating earnings in the first quarter of last year, according to the company.
MetLife proposed recently to sell the deposits to GE Capital Retail Bank, GE's consumer-lending arm, rather than GE Capital Bank. The change moved review of the transaction to the OCC, which supervises GE Capital Retail Bank, from the Federal Deposit Insurance Corp. The FDIC met in September without acting on the deal, which the companies hoped to close by mid-2012.