Growth on the cards for GE Capital
Launching a new credit card has helped GE Capital ring up a 29% increase in profits.
The finance company today announced profits of $149 million for 2011, compared to $115 million a year earlier.
GE Capital also reported business volumes of $1.769 billion in 2011, a 17% up from $1.515 billion.
The “strong” growth stemmed from commercial finance volumes increasing 15% and consumer volumes 18%.
The bank last year launched GEM Visa, a card that claims 80,000 users.
Managing director Aaron Baxter says growth was helped by strong links with retailers.
The bank also offers six months interest-free credit, instead of the usual 55 days, for purchases above $250. Outstanding amounts are then charged 24.9%.
Another moneyspinner was providing finance for retailers such as Harvey Norman.
“We do a lot of interest free. Close to 80% of payments are completed within that period. That’s the cheapest form of finance available. We generate income [from it] via the retailer,” Mr Baxter said.
GE Capital also acquired the Face financial portfolio from South Canterbury Finance for $100 million.
The financier already had an extensive equipment finance operation and they saw saw "strong alignment" there.
“We could assure them of going forward [with their purchases].”
Being part of a global multinational, Mr Baxter said GE in New Zealand was able to access plenty of capital for loans, both from its US parent and the money markets.
“We are always funded 12 months in advance.”