GE Money eyes emerging markets for growth

General Electric Co's consumer finance unit will use joint ventures for retail banking in markets including India, China and Eastern Europe to keep increasing assets at "high-double digit" rates this year, GE Money Chief Executive Officer David Nissen said.

"Our strategy is emerging-market banking," Nissen said in a March 14 interview. "Emerging markets will be a strong growth area for the next 10, 20 years."

The division's 190 billion in assets should rise about 15 per cent in 2007, while profit may climb 10 per cent to 15 per cent, according to a December presentation to investors.

GE Money, the world's biggest issuer of private-label credit cards, uses retail banking and partnerships in emerging markets to expand into lending for large items such as washing machines, automobiles and homes.

"Eventually, we like to either team up for banks or actually apply for a banking license," Nissen said. GE also seeks minority stakes with banks because "we need both options to expand our business."

GE Money gets about 75 per cent of its sales from outside the US, with average asset growth of 18 per cent yearly. The unit, with $190 billion in assets, provided $21.8 billion of the Fairfield, Connecticut-based parent company's $163.4 billion in sales last year.

The consumer finance unit won't move into US or UK banking because the market is too saturated, Nissen said. In the past four years, the division has signed partners in Turkey, South Korea, India and China. The unit is looking for similar partnerships and is "on the verge" of announcing several new deals, though Nissen declined to name them.

In February, GE Money said it would acquire a 39.3 per cent stake in Banco Colpatria - Red Multibanca Colpatria SA, a consumer and commercial bank based in Bogota. GE has options to buy another 25 per cent stake from Mercantil Colpatria by 2012.

"In many cases, we feel it makes more sense to do partnerships," Nissen said.

"You get a strong local partner who is well connected in that country and we bring best practices into the bank." GE provides its brand and consumer lending to well-established commercial banks, he said.

GE Money also oversees WMC Mortgage, the fifth-largest subprime mortgage lender in the US.