MetLifeIn order to avoid new federal rules and heightened scrutiny from the Federal Reserve and other regulators as a "systemically important financial institution," MetLife has decided to sell its banking unit. MetLife (MET) is the largest life insurer in the U.S., and joins competitors AIG (AIG), Hartford Financial Services Group (HIG) and Allstate Corporation in selling off banking operations to escape from added restrictions.

We have a price estimate of $49 on MetLife's stock, implying a premium of about 15% over the current market price.

MetLife's Banking Operations at a Glance

Through MetLife Bank, the company offers a variety of mortgage and deposit products. Mortgage products offered by MetLife Bank include forward and reverse residential mortgage loans, while deposit products include traditional savings accounts, money market savings accounts, certificates of deposit and individual retirement accounts. MetLife Bank accounted for about 2% of the company's first quarter operating earnings.

MetLife plans to continue offering mortgage products after the proposed sale of MetLife Bank on a state-by-state basis.

How This Affects MetLife

The sale of MetLife Bank and a restructuring is the wisest course of action for a company with the vast majority of its businesses in the insurance sector. It doesn't make sense for MetLife to allow itself to be governed by regulations written for banking institutions, rules which could make it less competitive in the insurance market. The sale will put MetLife on a level playing field with other insurance companies that don't have banking operations.

See our complete analysis of MetLife

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July 28 2011 at 6:18 AM Report abuse rate up rate down Reply

How does this effect annuities Met-Life?

July 27 2011 at 3:35 PM Report abuse +1 rate up rate down Reply

......instead of increasing regulations, the gov should have broken these investment banks apart. Now they are doing it themselves to prevent "intrusive" regulations. Watch the domino effect on other "investment institutions"/banks.

July 27 2011 at 1:13 PM Report abuse rate up rate down Reply

Finally a MAN running things.
Bush should be known as the magical president. When the twin towers were hit Bush DISAPPEARED. The Iraq nuclear missiles DISAPPEARED. $billions in cash just 'disappeared' in Iraq. The CIA tapes of interrigation DISAPPEARED. Bush was nowhere to be found when 'shotgun Dick' disclosed that Valerie Plame was a (covert) CIA station chief. which was classified information. When our embassy in Serbia burned Bush DISAPPEARED. Bush's Robber Baron presidency has made our money DISAPPEAR. With Voodoo Economics Georgie has made most of our jobs DISAPPEAR. But what would happen if Bush really disappeared? Can you imagine 'Deadeye Dick' with his finger on the nuclear trigger? If that were to happen everyone might just DISAPPEAR!!!!!!! When he wanted to put all the Social Security money in the stock market, Barney Frank said that Wall Street needed to be re-regulated. Bush replied by disappearing. He did manage to APPEAR just long enough to lobby for and sign into law CORPORATE WELFARE for the international banks. Goodbye Goofball Georgie, have fun in Texass.

July 27 2011 at 12:39 PM Report abuse -3 rate up rate down Reply

Good choice, MetLife. I will be happy to see banking confined to banks and insurance confined to insurance companies. If that is the result of greater scrutiny of banking operations it is a good result.

July 27 2011 at 11:42 AM Report abuse rate up rate down Reply