updated 6/21/2004 11:11:36 AM ET 2004-06-21T15:11:36

General Electric plans to bring together all of its consumer finance businesses under a single global brand in preparation for an aggressive expansion into retail banking.

GE Money, as the business will be known, aims to capitalize on the U.S. conglomerate's strength in store cards and sales financing by offering personal loans, mortgages and dual-use credit cards direct to consumers.

The rebranding, which recently began in Germany and Australia, is expected to be rolled out across 15 other Asian and European countries this autumn and launched in the U.S. next year.

GE offers some retail banking products in less developed markets, but hopes to create a global brand to rival those of Citigroup and HSBC by renaming local operations and extending business-to-business activities in more mature markets such as the U.S. and UK.

"The next stage in our evolution is going to be more direct to consumers," said David Nissen, president and chief executive of GE Consumer Finance in an interview. "[This rebranding] says we have arrived as a global consumer finance leader."

With its larger commercial finance division, GE is increasingly a competitor to conventional banks and ranks as the fifth-largest US bank by assets. Yet this is the first time the scale of its ambitions in retail markets has been articulated and reflects a recent decision by Jeffrey Immelt, GE group chairman and chief executive, to make more use of the parent company's brand.

Mr. Nissen said GE had identified a niche providing loans to consumers with poorer credit scores, where it hoped to be faster and more flexible than banks but cheaper and more responsible than less well-known rivals.

"Many people see consumer finance companies as easy to do business with, but higher price, and banks as hard to do business with - if you can get their products at all," he said. "We want to be a best-in-class combination of a consumer bank and a consumer finance company."

But this is a crowded market for GE to enter, particularly in the U.S., and stems partly from a fear that its traditional store cards and retail finance businesses will no longer be profitable enough to satisfy internal growth targets. Overseas, GE's strategy has also required expensive investment in retail branches.

GE began offering financial services in the 1930s to help consumers fund purchases of its household appliances during the great depression. Under Jack Welch, GE Capital grew to generate about half the conglomerate's profits before being split by Mr. Immelt into two broad divisions - consumer and commercial.

Copyright The Financial Times Ltd. All rights reserved.


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