GE Money, the consumer finance arm of General Electric, is close to launching a credit card in China in partnership with Wal-Mart, the world’s biggest retailer.
The partnership, a key element of GE Money’s aggressive expansion into Asia’s fast-growing retail banking markets, could be announced as early as this week. It would mark GE Money’s first significant foray into the Chinese consumer finance market, where less than 5 per cent of the population have credit cards.
HSBC stole a march on GE Money last month by launching a separate credit card partnership with Wal-Mart in collaboration with Bank of Communications, China’s fifth-biggest lender, in which HSBC holds a 19.9 per cent stake.
GE Money, the sole provider of private label cards to Wal-Mart’s US operation, was considered a front-runner in the race to help it launch the first Chinese credit card issued by a foreign retailer.
Both companies declined to comment on the timing of the deal. But Yoshiaki Fujimori, head of the Asian operation of GE Money, told the Financial Times in an earlier interview that plans for a credit card link-up with Wal-Mart were intact, in spite of the HSBC announcement. Mr Fujimori said the GE-Wal-Mart venture would focus on card issuance in Wal-Mart stores in southern China.
“Given the size of the country and the challenges of moving into a new market, it might be a good idea for us to initially focus on the southern regions,” he said. “In the next few years, however, we are hoping to win a greater share of Wal-Mart’s China business, because we are confident we can do a better job.”
GE Money was “diligently looking” for acquisitions in other Asian markets such as Vietnam and Malaysia, Mr Fujimori said.
While GE Money Asia is seeing rapid growth and high margins in its emerging Asia operations, the company is facing declining profits and regulatory problems in its core Japanese market. Last week, GE Money suffered a blow in Japan, where it was ordered to suspend business at two of its call centres for five days as a penalty for breaching strict rules on debt collection.
