Lending by GE Capital’s commercial arm – which finances plant and equipment in the forestry, transportation and construction industries – rose 6% in the past year.
GE Capital, New Zealand’s fifth biggest lender, says its core earnings eased to $145 million in 2012 from $149 million in the previous year – with the slight decline reflecting the impact of discontinued businesses.
However, GE Capital’s exit from New Zealand home mortgage lending incurred a final one-off charge of $138 million, taking the company’s net profit down to $7 million in 2012 from $134 million a year earlier.
The company sold about $1 billion of New Zealand mortgages to Pepper Australia in 2011, as part of a package of A$5 billion of Australian and New Zealand mortgages, in line with GE’s worldwide policy of exiting marginal businesses.
The company’s operating income fell by 5% to $390 million.
Kerry Conway, managing director of GE Capital for Australia and New Zealand, says it “took some time” to work through the mortgage lending transaction completely, but that the one-off adjustment of $138 million would complete the entries for the sale. Net lending assets were up 2% at $2.4 billion.
Lending by the company’s commercial arm in forestry, transportation and construction rose 6%.
Conway says deleveraging – by both consumers and businesses – was again a feature “although we we are starting to see that plateau a bit now”.
