MetLife eager to use reserve capital Shares in MetLife hit a four-month high as the insurer said it was preparing to return more capital to shareholders or make an acquisition once it was no longer under the oversight of the Federal Reserve. The company has fallen under the Fed's supervision, designated as a systemically important financial institution as part of the Dodd-Frank Act because it is a bank holding company with more than $50bn in assets. That has limited its flexibility to use its cash because such groups must receive Fed approval for distributions. But MetLife is moving to loosen the Fed's grip. In December it sold its banking unit to GE Capital, with the deal expected to close later this year. It is also now winding down its mortgage origination business, for which it failed to find a seller. Steven Kandarian, chief executive, said on Wednesday at an insurance industry conference that MetLife could begin to return capital later this year, once the GE Capital deal closed, expected in the second quarter, and its January filings to the Fed have been reviewed, likely in March. We have excess capital [that] we've been trying wildly to return to shareholders. But we have an impediment right now. We have to go through a capital plan process with the Federal Reserve," Mr Kandarian said. He added: "We also want some dry powder in case of opportunistic acquisitions in markets we are seeking to grow in." Last year, MetLife bought Alico, a unit of AIG, for $13.6bn, and has said it has $3bn-$4bn to spend on further international expansion. MetLife could still be deemed systemically important by the Fed as the US's largest life assurer. But that status would not likely begin until 2013, as regulators are still formulating such rules. Even in that case, it would still have a window between the closing of its bank sale and 2013 to return capital. In the meantime, its limbo status has weighed on its share price. MetLife is down 14.8 per cent since the beginning of last year, versus a 6.1 per cent decline in the KBW Insurance index. But with the sale of the bank, MetLife has begun to rebound. It ended the session on Wednesday with its highest close since August, up 1.5 per cent to $37.89. The shares are up 21.5 per cent so far in 2012, versus a 9.5 per cent gain in the KBW index. The company is in the middle of a transition from life assurer to a more diversified insurance business, trying to wind down its sales of some annuity products. It is still seeking a permanent chief financial officer. It reported fourth-quarter operating earnings from non-divested businesses grew 17 per cent from a year ago, at $1.4bn, versus $1.2bn. That excluded a $1.5bn gain from derivatives used to hedge interest rate risk.