GE Capital India has exited mortgage business in India with the completion of sale of its housing finance arm and also its entire home loan portfolio (held through another entity) to Magma Group. The mortgage business was operated under the GE Money brand.
Magma Advisory Services, a group company of Magma Fincorp, has acquired 100 per cent equity share capital of GE Money Housing Finance. In addition, it has acquired the entire home loan and home equity portfolio of GE Money Financial Services Pvt Ltd.
As on end January 2013, GE Money Housing Finance had a home loan portfolio of Rs 540 crore. The home loan portfolio of GE Money Financial Services stood at Rs 810 crore.
Although the deal value had not been made public, both the transactions have resulted in gains for GE Capital India, it is learnt.
“Our mortgage business was profitable. Due to a strategic realignment, and a strong focus on commercial finance and credit cards, we decided to move out of that space in India. We ran the mortgage business until we found the right partner and price for it”, said Anish Shah, GE Capital’s President and CEO in India.
The exit from mortgage loan business is in line with the GE Capital’s strategy to focus on growing its credit card joint venture (with State Bank of India) and its commercial finance businesses in India, he said.
Within commercial finance, GE Capital has offerings in corporate loans, leasing, healthcare finance and private equity.
“We are exploring faster growth in areas like factoring and distribution finance that leverage GE’s global product and process strengths,” Shah said.
Launch pad
According to Sanjay Chamria, Vice-Chairman and Managing Director of Magma the acquisition would enable the company to launch its mortgage business and provide it with a platform to enlarge its bouquet of products. The acquisition would help it gain access to around 10,000 existing customers, he added.