General Electric Co. plans a big expansion of its retail banking business in emerging European and Asian markets, becoming a more formidable rival for Citigroup Inc., the Wall Street Journal said on Tuesday.
GE, based in Fairfield, Connecticut, has a big presence in U.S. credit cards and European consumer lending. But now it wants to offer basic products in developing countries such as checking and savings accounts, the newspaper said.
Retail banking is another “weapon to compete with”, David Nissen, chief executive of GE Consumer Finance, told the newspaper.
According to the newspaper, GE plans to test its expansion strategy in central and eastern Europe, an expected high-growth region where GE Consumer Finance already has retail bank branches in the Czech Republic and Hungary.
Nissen said he wants, through acquisitions, to double or triple GE’s estimated $6 billion of assets in the region in three to five years. He also said he wants growth in Asia on an “opportunistic basis” in what he called “all major economies.”
Russia ripe for expansion
The newspaper said countries ripe for retail expansion include Russia, where GE this month agreed to buy Deltabank for $150 million. It said they also include Turkey, Indonesia, India, Malaysia and Thailand.
For its part, Citigroup aims for a top-five market share ranking in major central and eastern European countries, and has so far achieved that only in Poland, according to Atif Bajwa, its consumer banking chief in the region, the newspaper said.
GE’s rivals in Asia would include Britain’s HSBC Holdings Plc and Standard Chartered Plc, as well as Citigroup.
GE said its consumer finance unit last year earned $2.16 billion on revenue of $12.8 billion. Among GE’s other businesses, only power systems and commercial finance were more profitable, while aircraft engines and insurance were nearly as profitable, the company said. Total profit was $15 billion.
