Merrill to sell loans unit to GE

Merrill Lynch made heavy losses from investments linked to sub-prime mortgage debt

Merrill Lynch, which has suffered badly in the credit crunch, has said it will sell most of its capital lending business to a unit of General Electric.

The value of the sale has not been announced, but Merrill's new boss John Thain said it would free up $1.3bn (£656m) to spend elsewhere in the firm.

The bank wrote down $8.4bn in its last set of three-month results, after its exposure to the US sub-prime crisis.

Some analysts expect it to make further losses in the next three months.

GE Capital is to buy Merrill Lynch Capital's corporate finance, equipment finance, franchise, energy and healthcare finance units.

The commercial real estate finance unit is not included in the deal.