GE Money pimps its Australian mortgage loan book of $5 billion, as the US General Electric parent seeks to get back to its knitting [manufacturing].
But Australia's big banks will be taking that into their stride
Commonwealth Bank [CBA] and National Australia Bank [NAB] are among those believed to have issued an indicative bid for the lending book. Others looking at the bid include Australian non-bank lenders.
GE Money ceased taking loan applications for mortgages in Australia two years ago, after mortgage credit became hard to set and the mortgage meltdown in the US market spooked them.
In 2008, CBA bought a 30 percent share of Aussie Home Loans who then grabbed the Wizard Home Loans portfolio for a fraction of the $400 million paid for the business by the US company four years earlier.
As part of that deal, CBA emerged with a $2 billion mortgage portfolio with loans originated under the Wizard brand.
At its peak, GE Money was the biggest non-bank lender in Australia, & looked the contender to take on Australia's big four banks.
But when the Global Financial Crisis hit, GE Money was hit with big losses around the world, and the need to refinance its lending arm threatened GE's existence.
GE has since recovered, and following the financial crisis has changed strategy to focus more on making industrial products and less on financing. Hence the mortgage sale.
