Magma FinCorp, a non-banking finance company (NBFC), and its affiliates acquired the business comprising a home-loan business and an SME mortgage loan business — and 10,000 customers — in an all-cash deal.
Anish Shah (pictured), president and CEO, GE Capital India, said the money received will be allocated to grow extant businesses.
“We are globally gravitating to businesses where we have a very good value proposition. We will continue to focus on growing our commercial finance business and credit card joint venture with State Bank of India,” said Shah.
As part of the transaction, Magma FinCorp will fully acquire GE Money Housing Finance for `660 crore, and the home equity loans portfolio of GE Money Financial Services with `940 crore loan assets as on May 31, 2012.
The funding will be refinanced by 20 banks and includes top nine public sector banks.
Sanjay Chamria, vice chairman and managing director, Magma Fincorp, said the acquisitions, while strengthening Magma’s presence in the retail lending space, also offer an excellent platform for Magma to leverage its network in the rural and semi-rural India for its home loans foray.
Customers will continue to be serviced by the GE Money team till the completion of the transactions.
As far as GE Capital India’s commercial financing business is concerned, healthcare finance doubled volumes last year. “Corporate debt, which is mostly term loans, are more focused on mid-market. Our leasing business is also doing very well, especially auto. We have bagged 50 of the top 200 signed up with no losses till date,” said Shah.
The company’s credit card business with State Bank of India (SBI) witnessed 60% growth in issuance with spends by the cardholders growing roughly by 40%. The business has seen a gradual decline in delinquencies over the last few years among credit card users and it is well below what it was 2-3-4 years ago, Shah said.
Said to be the No. 2 player in the country in terms of new card issuances, SBI Cards currently has around 2.3 million cardholders.
“We don’t want to be in a race to be the No. 1. We’d rather grow credit cards as a solid, quality business,” said Shah.