GE Money to close around 100 branches in India
GE Money India, the consumer finance company of General Electric (GE), has decided to shut down close to 50 percent of approximately 100 branches in India in the next few months, according to a story by the Economic Times.
Last year, the company announced it planned to reduce its total number of branches to 250 by 2011. The move comes in the wake of India’s recent economic slowdown, which has particularly hit retail-lending business in the country.
GE says it hasn’t determined how many jobs will be cut because of the closure. A GE spokesperson released the following message via email: “The entire industry in India is currently facing very challenging conditions due to an increasing interest rates and delinquencies. The current market realities have made it necessary for us to reassess our business model. In the immediate term we are focusing on reducing operating expenditures and improving operating efficiencies, as well as building a more focused business in terms of product offerings and consolidating in cities where we have a competitive advantage and scale.”
GE was earlier reportedly in talks with several finance companies in India and abroad for divesting a majority stake in GE Money. Morgan Stanley was given the mandate to find a strategic partner for the business. But the negotiations dissolved and GE merged GE Money with GE Commercial Finance as part of an internal restructuring exercise. The merger was aimed at consolidating operations of both the finance subsidiaries under the GE Capital umbrella.
