According to RBS, the acquisition of the offshoot, which is located in Frankfurt, is expected to be completed by the third quarter.
As of December 2009, the unit had assets worth â¬169 million.
In a statement, RBS said: âAs part of the group's strategic plan, announced in February 2009, it was concluded that the assets would be better placed with a new owner outside of RBS.â
Rich Laxer, president and chief executive officer of GE Capital EMEA, said: âThe acquisition of RBSâs German factoring business perfectly fits our strategic focus on SMEs.
âBuilding on the near record volumes we financed in 2009, this acquisition will reinforce our position as a leading provider of accounts receivable financing in Germany.â
The deal is subject to approval from regulators and is part of a five-year strategic plan implemented by RBS as it looks to boost its balance sheet.
Currently, the bank is 84 per cent owned by the government after receiving financial aid from the authorities to stay afloat in the aftermath of the credit crunch.
By Jim Ottewill