GE Consumer Finance eyes Malaysia, Philippines

Ridha Wirakusumah, president of GE Consumer Finance Asia, elaborates that the company’s strategy to grow in the region will increasingly hinge on acquisitions.

In the past four years, GE Consumer Finance (GECF), the global consumer-lending unit of US-based General Electric, has quadrupled the size of its business in Asia in terms of assets and revenue mainly through alliances and expansion of its own network. Ridha Wirakusumah, GECF Asia president, says that with Asia growing rapidly the company has decided to take a different growth strategy.
“Acquisition, I think, is going to become a little bit more prevalent in the way we grow, but even without acquisition we are growing rapidly,” he says. “We are looking at opportunities across all our existing markets in Asia, but Philippines and Malaysia are pretty much on our radar screen.”

Ridha explains that Asia is GECF’s fastest growing region and has been identified as a key contributor to the company’s future growth and development. GECF, which accounts for about a third of GE’s total assets, reported total profit of $2.16 billion and assets of $106 billion for last year.

In Malaysia, GECF has reportedly received approval from Bank Negara, Malaysia’s central bank, to negotiate with a local partner for the establishment of a joint venture in consumer finance. Ridha thinks GECF’s Asian business three years from now can be at least two to three times the size it is today. “I’d like to be in all markets (in Asia). I’d like to be in all consumer (finance) products,” he declares.

Ridha says his approach involves a simple consideration: “How can I come into and be able to compete in a market where the customers will come to us because they want to, because our product offering is better than everybody else’s? It’s much easier said than done but that’s what we’re striving for.”

Last August, GECF entered into a strategic joint venture agreement with Hyundai Capital Services (HCS), Korea’s leading consumer finance company. Under the agreement, GECF will acquire 38 percent of the outstanding common stock of HCS, valued at approximately $375 million with an option to purchase an additional five percent at a later date. In addition, GECF will also purchase subordinated debt of $330 million and make an additional capital contribution of up to $116 million.

In Australia, GE Money, which holds the group’s consumer finance operations, reportedly grew its business from $4 billion in assets four years ago to $38 billion in assets or almost as big as the country’s largest banks, primarily through acquisitions. It also appears interested in acquiring one of the profitable mid-tier banks such as St. George, Bank of Queensland or Bendigo Bank.