WELLINGTON: GE Finance and Insurance, part of General Electric’s finance arm which is selling down most of its assets worldwide, recorded a 10% fall in profit last year, reflecting a decline in finance income and rising costs.
Most of the businesses of GE Capital, the finance unit of New York Stock Exchange-listed GE, are being sold as part of a strategy to shed some $US200 billion in finance assets and focus on industrial manufacturing, such as jet engines and power turbines.
In March, a consortium of Varde Partners, KKR and Deutsche Bank agreed to buy GE Capital Australia and New Zealand’s consumer lending business, including sales of finance, credit card, personal loans and general insurance for $A8.2 billion. That included GE Money, GE CreditLine, the GEM Visa card and the Countdown OneCard Visa credit card. In April, GE said it would create “a simpler, more valuable company” by reducing the size of its finance businesses.
Remaining assets targeted for disposal in GE Capital include real estate, commercial lending and leasing, and all consumer platforms including US and international banking assets.
“GE Capital is currently selling all of its lending and leasing operations in New Zealand,” said Anthony Spargo, communications & public affairs director at GE Capital, Australia & New Zealand. “GE will remain in New Zealand with a focus on its industrial businesses, similar to the global strategy.” He declined to make further comment on the sales process or the 2014 financial performance of its local GE Finance and Insurance unit.
The New Zealand finance business recorded a profit of $62.9 million in calendar 2014, down from $69.9 million a year earlier. Net finance income fell 6.5% to $177.6 million as interest income from loans and finance leases declined. Non-finance income rose 4.4% to $212 million, led by a 6.7% gain in income from operating lease rentals.
It has loans and receivables of $1.88 billion as at December 31, down from $1.9 billion a year earlier.
