Tomahawk, WI 12/02/2013 (BasicsMedia) – General Electric Company (NYSE:GE) has operated for many years as a successfully diversified business. But the 2008-9 financial crisis revealed that being big everywhere can sometimes become a burden. This is why GE management has thought it wise to spin of its financial business.

This means that General Electric Company (NYSE:GE) will be left to focus more on its industrial segment.

So the company announced the spin off North America Retail Finance through an IPO. This is the best thing that should happen as it will allow the new entity to not just focus on crisis management in the manner of dealing with size and all that, but now having to focus on its growth.

It is important remembering that as of fiscal year 2012, the segment earned $2.2 billion in profits and the same figure is expected in this current fiscal year (2013).

The spun off of General Electric Company (NYSE:GE)’s financial entity, although only having foothold in North America, will still remain among the largest installment and revolving credit providers in the U.S. Going by its present customers, Retail Financial is working closely with nearly 150,000 entities in the aforementioned category.

The company will be able to use the IPO proceeds to better its position so that it can turn even more profitable. While the new entity will face fresh opportunities, there will also be a lot of challenges which come with the IPO. First, after the spin off, the resulting business will not look up to GE for bailout in case of financial crisis.

Moreover, there is already competition in the segment and the management of the resulting entity has a lot of homework to do in warding off market competition. The chief competitors include Discover Financial Services (NYSE:DFS), American Express Company (NYSE:AXP) and Capital One Financial Corp. (NYSE:COF) among others.

Looking at the foreseeable challenges for the new entity and the opportunities, it looks positive in the spin off. This will allow speedy growth and profitability and General Electric Company (NYSE:GE) will also have reduced some management headache.

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