GE to investors: We’re still OK

General Electric Co. said its financial services units didn’t need to raise external capital, affirmed its profit forecast for the commercial real estate unit and said its consumer-finance division, GE Money, had “adequate reserves.”

Profit at the finance units, collectively known as GE Capital, was $5.2 billion in the first half of 2008, General Electric said in a memo posted on its website in an effort to reassure investors amid “extraordinary market conditions.”

Last week, the U.S. government took over mortgage lenders Freddie Mac and Fannie Mae. Separately, Bank of America Corp. reached a deal Sunday to acquire Merrill Lynch & Co. for $44 billion, after shares of the third-biggest U.S. securities firm fell more than 35% last week and smaller rival Lehman Bros. Holdings Inc. neared bankruptcy.

GE, which got about half its profit and sales from finance-related businesses last year, said it continued to have an “unwavering commitment” to maintaining its triple-A credit ratings from Moody’s Investors Service and Standard & Poor’s, the highest available.

Shares of the Fairfield, Conn., company fell Friday the most since it cut its annual forecast five months ago, dragged down by financial stocks including American International Group Inc. and Lehman. The stock lost $1.41, or 5%, to $26.75.

GE Money is “adequately reserved” for delinquencies, which were at 5.9% in the second quarter, equal to a December 2002 high. The company will increase allowances for losses if delinquencies rise, the memo said.

Chief Executive Jeffrey Immelt plans to reduce GE Money by about half through divestitures. In the second quarter, GE Money’s profit fell 9% on higher write-offs and delinquency rates, less than the 20% forecast in April.

The commercial real estate division is still expected to earn $1.5 billion to $1.7 billion this year.