Feb. 22 (Bloomberg) -- General Electric Co. is seeking potential partners or buyers for some consumer credit card, mortgage and loan units outside the U.S. to reduce riskier financial assets, according to three people with knowledge of the plan.
GE Money, the world's biggest issuer of store-branded credit cards, is reviewing its card portfolio in markets including the U.K. and Australia, said two of the people who declined to be named because the talks are private. The Fairfield, Connecticut-based company met with banks in those countries to gauge interest, they said.
A decision to sell or seek a partner for some overseas consumer-loan units would expand on Chief Executive Officer Jeffrey Immelt's announcement in December to do the same for the U.S. card unit. He wants to shift as much as $50 billion in assets to commercial finance businesses that have higher returns and lower risks of default.
``Most of the U.K. banks are trying to control rising card delinquencies,'' said Simon Willis, an analyst at NCB Group in London. ``Over the last two years growth has slowed dramatically.''
Developed countries such as the U.S. and U.K. may have rising delinquencies as their economies slow, increasing the risk of consumer defaulting on their payments. GE Money's U.S. delinquency rate rose to 5.52 percent last year from 4.93 percent. The rate outside the U.S. was little-changed at 5.3 percent.
`Evaluating Our Portfolio'
``We've maintained consistently that we're evaluating our portfolio around the world,'' said Robert Rendine, a U.S. spokesman for GE. He declined to comment on specific countries or markets.
The card unit is part of GE Money, the consumer-finance division where Immelt has said profit will be little changed this year. GE Money, which is moving its headquarters to London from Stamford, Connecticut, has about 4,000 employees in the U.K. and serves about 10 million customers, according to its Web site.
GE Money provided $25 billion of the parent company's $172.7 billion in sales last year. About 75 percent of the segment's sales and more than two-thirds of the profit came from outside the U.S. last year.
GE last year announced the sale or partnership of all of GE Money Japan's consumer unit and last month said it was seeking partners for non-card units in India.
The company is using partnerships to expand in emerging markets, including a 43 percent stake in Hyundai Capital Services Inc. in South Korea and a 26 percent stake in Turkey's Turkiye Garanti Bankasi AS.
U.K. Credit Cards
General Electric is also reviewing its U.K. consumer finance businesses, the people said.
The U.K. has more payment cards per adult than any other country in Western Europe, with average British adults carrying 2.8 cards in their wallets, according to London-based Datamonitor Plc. Even so, the U.K. credit market is forecast to grow at an average annual rate of 0.2 percent, the slowest pace in the region, Datamonitor said in a report this month.
The consumer finance unit's assets rose to $211 billion last year from $180 billion in 2006, according to General Electric's annual report to the U.S. Securities and Exchange Commission. About $34 billion of the assets are related to credit cards including private labels.
HSBC Offices
GE is not the only company that has been repositioning its credit businesses in Europe. HSBC Holdings Plc, Europe's biggest bank by market value, in October sold 338,000 U.K. credit card accounts to SAV Credit Ltd. for about 385 million pounds ($757 million).
HSBC has closed some U.S. offices and changed management and is scaling back its subprime lending after profit was eroded by bad loans. The bank will continue its U.K. cards operation for mainstream borrowers with its HSBC and First Direct brands and through retailers.
Royal Bank of Scotland Group Plc, HSBC and Barclays Plc are the biggest credit card issuers in the U.K., according to Datamonitor.
Credit card balances in Australia amounted to A$43 billion ($39.6 billion) at the end of last year, according to the Reserve Bank of Australia. The biggest card issuer in that market is Commonwealth Bank of Australia, followed by Westpac Banking Corp.
GE's credit card receivables in Australia are more than A$2 billion, according to one of the people.
GE's U.S. private-label credit-card unit operates branded cards for companies such as Wal-Mart Stores Inc. and J.C. Penney Co. The company has already received ``expressions of interest,'' for the U.S. unit, amid a slowing economy, Immelt said in December.
General Electric declined 14 cents to $33.55 at 4 p.m. in New York Stock Exchange composite trading. The shares have declined 5.2 percent in the past 12 months.
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