GE Money prepares to enter deposit and credit card markets
GE Money has confirmed it is keen to become a player in the credit card and deposit space, but is refusing to "lock in" a start date.
Thursday, October 15th 2009, 5:01AM
The firm's parent, General Electric, has an AA+ rating, putting it on a par with sovereign debt and above the banks. It is the strength of this rating which GE Money is keen to leverage in the local market.
"From our point of view, being owned and funded by an AA+ rated parent actually is, and should be, a competitive advantage and indeed is what we think will be a very strong value proposition for New Zealanders," GE Money managing director New Zealand Greg White says.
GE Money describes itself as the largest non-bank finance and its portfolio includes home loans; general insurance; retail sales finance; as well as car and personal loans.
Currently the biggest credit card issuer in Australia, White says there has been little point in GE Money entering the NZ credit card market until the Commerce Commission settled proceedings around interchange fees, which has now been achieved with most parties. It is also reluctant to enter the deposit space until the current Government retail deposit guarantee scheme expires in October 2010 and it can better play its financial strength card.
"I think the (guarantee) extension is not such an issue, because the new rules are a lot tougher and you can actually develop and send out the message on your value proposition at that point," White says.
He believes "consolidation and rationalisation" are inevitable in the deposit space and GE Money's strength and security based proposition will be particularly strong.
Once the Government guarantee is removed, and the Reserve Bank Amendment Act is implemented the deposit space will "again continue to morph and probably be smaller".
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