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Business Times - 25 Jan 2011
Stanchart to buy S'pore moneylender GE Money
Deal gives bank S$2.35b in loans and a foothold in S'pore car-loan market
By CONRAD TAN
STANDARD Chartered has agreed to buy Singapore consumer moneylender GE Money and its S$2.35 billion worth of personal loans and car loans for an undisclosed sum.
The deal will give Stanchart a Singapore car-loan business which it doesn't currently have, said Dennis Khoo, the bank's Singapore consumer banking head.
'Plus, they have a very solid management team that we believe can take this business to further heights,' Mr Khoo added.
The bank is paying $850-900 million for GE Money Pte Ltd, the moneylender's operating entity here, Dow Jones reported, citing a person familiar with the transaction whom it didn't name. When contacted, a Stanchart spokesman told BT that the figure was 'speculation' but declined to comment further on how much it is paying.
The transaction is expected to be completed in the first quarter of this year, subject to regulatory approvals, Stanchart said.
GE Money Pte Ltd is a subsidiary of GE Capital, the financial services division of US conglomerate General Electric Co.
It employs some 200 people here, and had gross assets - consisting almost entirely of customer loans - of S$2.35 billion or some US$1.81 billion as at Dec 31, 2009. A spokesman for the firm declined to give a breakdown of the loan book.
BT understands that car loans make up the majority of its loan book, and that the bulk of its new loans in recent months have been for used-car purchases, as soaring certificate of entitlement prices have made used cars more affordable than new cars for many buyers.
Mr Khoo confirmed that its emphasis on used-car loans made the deal even more attractive to Stanchart, 'GE is big in used cars, so they're in a sweet spot,' he told BT.
Banks here had combined outstanding car loans of S$11.7 billion at the end of November, according to data from the Monetary Authority of Singapore. That doesn't include loans by moneylenders such as GE Money, which aren't regulated by MAS, but are governed by the Moneylenders Act regulated by the Law Ministry.
Stanchart had a Singapore consumer-banking loan book of some US$15.5 billion at the end of 2009, including home loans, personal loans and loans to small and medium enterprises, according to its annual report.
Rahul Gupta, president and CEO of GE Money Singapore said the deal was 'a good outcome for GE Money's business, employees and customers in Singapore'. Its operations will continue as normal, pending the close of the deal, he added.
Stanchart declined to say if it would keep all 200 of GE Money's staff after the acquisition. But it's likely to retain GE Money's current management to run the business, since it doesn't have an existing car-loan business of its own.
Morgan Stanley advised GE Money on the transaction, while Stanchart didn't hire an outside adviser.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
.
Business Times - 25 Jan 2011
Stanchart to buy S'pore moneylender GE Money
Deal gives bank S$2.35b in loans and a foothold in S'pore car-loan market
By CONRAD TAN
STANDARD Chartered has agreed to buy Singapore consumer moneylender GE Money and its S$2.35 billion worth of personal loans and car loans for an undisclosed sum.
The deal will give Stanchart a Singapore car-loan business which it doesn't currently have, said Dennis Khoo, the bank's Singapore consumer banking head.
'Plus, they have a very solid management team that we believe can take this business to further heights,' Mr Khoo added.
The bank is paying $850-900 million for GE Money Pte Ltd, the moneylender's operating entity here, Dow Jones reported, citing a person familiar with the transaction whom it didn't name. When contacted, a Stanchart spokesman told BT that the figure was 'speculation' but declined to comment further on how much it is paying.
The transaction is expected to be completed in the first quarter of this year, subject to regulatory approvals, Stanchart said.
GE Money Pte Ltd is a subsidiary of GE Capital, the financial services division of US conglomerate General Electric Co.
It employs some 200 people here, and had gross assets - consisting almost entirely of customer loans - of S$2.35 billion or some US$1.81 billion as at Dec 31, 2009. A spokesman for the firm declined to give a breakdown of the loan book.
BT understands that car loans make up the majority of its loan book, and that the bulk of its new loans in recent months have been for used-car purchases, as soaring certificate of entitlement prices have made used cars more affordable than new cars for many buyers.
Mr Khoo confirmed that its emphasis on used-car loans made the deal even more attractive to Stanchart, 'GE is big in used cars, so they're in a sweet spot,' he told BT.
Banks here had combined outstanding car loans of S$11.7 billion at the end of November, according to data from the Monetary Authority of Singapore. That doesn't include loans by moneylenders such as GE Money, which aren't regulated by MAS, but are governed by the Moneylenders Act regulated by the Law Ministry.
Stanchart had a Singapore consumer-banking loan book of some US$15.5 billion at the end of 2009, including home loans, personal loans and loans to small and medium enterprises, according to its annual report.
Rahul Gupta, president and CEO of GE Money Singapore said the deal was 'a good outcome for GE Money's business, employees and customers in Singapore'. Its operations will continue as normal, pending the close of the deal, he added.
Stanchart declined to say if it would keep all 200 of GE Money's staff after the acquisition. But it's likely to retain GE Money's current management to run the business, since it doesn't have an existing car-loan business of its own.
Morgan Stanley advised GE Money on the transaction, while Stanchart didn't hire an outside adviser.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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