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GE Money Australia & New Zealand today announced that it will cease offering home loans through all third-party brokers, mortgage managers and originators – excluding Wizard – effective today.
The shock news comes just one week after the lender announced it would not be able to pass on any of the RBA’s one per cent rate cut to its mortgage managers.
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The lender will also cease all new motor finance and small business finance in Australia and New Zealand.
CEO and president of GE Money Australia & New Zealand Mike Cutter said unprecedented conditions meant GE had to be “more selective in its allocation of capital” and needs to ensure it gets a reasonable return on investment.
“Home lending and motor finance are capital-intensive businesses and we have had to accept that the returns at present no longer justify the cost of funding these products,” he said.
“This was a very difficult decision to take. However we will now be able to better focus on those parts of the business that are our core strengths and in which we have scale.”
GE Money will continue to provide retail store finance, credit cards, personal loans and insurance sold through retail partners’ branches and online direct channels.
Of GE Money’s 4,500 employees approximately 335 positions will become redundant at various times over 12 months. About 110 of these redundancies will be in four weeks, with the balance occurring over the following year.
Mortgage Business will provide analysis of GE Money’s departure and reaction from the industry on Monday.
Published: 24-10-08
What impact will GE's decision have on your business? What are the ramifications for the mortgage industry as a whole? COMMENT HERE
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