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.”  

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4 Comments & Questions

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There is no such thing as interest free - no free lunches anywhere in this world

GE's effective interest rate is over 20%

How many borrowers know or more importantly understand all the detail when they are encouraged to sign up at Harvey Normans or direct with GE to " consolidate their debts"???

With our current low interest rate environment GE is at the grubby end of the market at their interest rates. And their risk margin is bloody ridiculous

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I got GE interest free finance when I bought a new car. Dealer refused to drop price for cash, even after several attempts so took the offer and only paid an extra $40 for admin costs, so was "interest free" for me. I wonder how much it cost him as I was willing to pay cash as I was mortgage free back then.

Ever since I paid it off, they keep trying to offer me a loan at 15%+. Why would I bother when I am on 5% floating with ASB with a line of credit far larger than GE would allow.

Still it is a better deal than the 100%+ deals the pay day loan places offer.

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We use our Gem Visa for any large purchases and they're always paid off inside the 6 months. It keeps the cash in our revolving credit saving us interest and costing us virtually nothing.

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GE Money is the BEST! I the GEM product

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