GE unit eyes more China partners in banking http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2007-03-09T115520Z_01_PEK24395_RTRIDST_0_BUSINESSPRO-CHINA-FINANCIAL-GE-DC.XML
Fri Mar 9, 2007
By Tamora Vidaillet
BEIJING (Reuters) - GE Money, the consumer finance arm of General Electric (GE.N: Quote, Profile , Research), hopes to launch more credit cards with retailers operating in China this year while keeping an open mind on potential acquisitions in financial services.
GE Money, in partnership with Shenzhen Development Bank (000001.SZ: Quote, Profile , Research), has launched two credit cards in China with Wal-Mart Stores Inc (WMT.N: Quote, Profile , Research) and French supermarket chain Auchan.
The U.S. firm was likely to set up new credit card programs with domestic or global retailers doing business in China, said Michael Barrett, who heads GE Money's local operations.
"We have a pipeline of programs we want to launch in 2007," he said in an interview. "We would like to launch a couple of products," he said, referring to new credit card programs with Shenzhen Bank. GE Money agreed to buy a 7.3 percent stake in Shenzhen Bank for $100 million in 2005, but the deal has been delayed partly by the bank's planned shareholding reforms.
GE Money was also open to more potential stake acquisitions in China if the right opportunities arose in one of GE's biggest growth markets, alongside India.
Barrett said the development of financial services infrastructure could be a potential investment area.
GE Money had struck a relationship with China's financial regulators through which it hoped to offer consulting services to help strengthen areas such as access to credit information, he said. The company could potentially be interested in investing in a domestic partner already operating in this space, he said.
GE Money aimed to expand its access to the country's nascent credit card market as Wal-Mart and Auchan spread the use of the firm's credit cards around the country.
Barrett said the focus of GE Money's partnership with Shenzhen Development Bank could soon include corporate banking as well.
GE money had already helped Shenzhen Bank develop expertise in personal loans, mortgages and wealth management over the past 18 months. The firm was also in the process of evaluating opportunities in auto finance and could look into mixing banking with leasing activities, he said. "We certainly believe, when we look at the marketplace, that there are opportunities to launch a product in auto financing," he said, adding this could be done with or without Shenzhen Bank.
Under current regulations, foreigners are unable to issue credit cards without a domestic partner in China, but industry sources have said they expect restrictions to be lifted from as early as April.
"If and when the regulations allow, we'd certainly want to look at that opportunity," he said.
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