GE Capital to scale up home loan biz

Aiming to expanding its leasing business in the country, GE Capital India is in talks with at least 100 companies and institutions to firm up agreements, aiming to grow 300-400 per cent annually over the next few years.

Already enjoying presence in the consumer finance sector, the company also expects to scale up home loan business.

Anish Shah, president and chief executive, said there is ample scope in the growing mortgage market in India.

The company had considered the idea of exiting the home loan business three-four years ago. On the leasing business, Shah said the company had funded various classes of equipment including automated teller machines, medical, construction equipment and corporate aircraft.

It aims to become number one player in the corporate leasing space, with 20-25 per cent market share in the next three years. The company, however, did not disclose the figures of its India operations, citing disclosure norms.

According to data by rating agency Crisil, GE Capital Service India had total assets of Rs 1,950 crore as on March 31. It reported a net loss of Rs 0.1 billion on a total income of Rs 2,200 crore at end of March. The company had posted a net loss of Rs 2,300 crore on a total income of Rs 3,500 crore in 2009-10. Commercial leases contribute to a significant portion of GE Capital’s commercial book size globally. The total leasing book is pegged at $125 billion.

According to industry estimates, leasing constitutes about two per cent of capital formation in India, compared with 17 per cent in the US.

Leasing as flexible finance option would reduce the administrative burden, with a flexible end-of-term option of redeploying the asset. With the rising cost of funds, leasing provides a choice to companies to fund their capital expenditure without the need to leverage their balance sheets.