GE Money to drop consumer boating loans
By IBI Magazine
GE Money announced on Friday that it will discontinue its retail boat loan programs. Cristy F. Williams,
vice president of communications for GE Money
Sales Finance, told IBI in an email that the company has been in the marine industry for 30 years. Industry estimates put GE's market share at about 10 to 12 per cent of the national total of retail boat loans. "We remain committed to growing and strengthening the Marine markets through our inventory finance programs and other financial solutions," said Williams, adding that the decision to exit the consumer loan side was "extremely difficult." "Based on the current economic environment, GE Money has been challenged to continue to deliver a strong level of return in the Marine space," she said. Williams noted that her division will continue to finance marine products such as Yamaha and Sea-Doo sportboats as well as Yamaha and BRP outboards through its Powersports division. "GE Money programs in Powersports, Trailer and Outdoor Power Equipment also remain unchanged," she wrote. But at least one competitor sees GE's departure as a chance to gain market share. "We see an opportunity not only in the retail space, but also in the commercial space," said Grant H. Skeens, President and CEO of Key Recreation Lending. "At this point, only KeyBank and Bank of America are the two national lenders that provide both retail and commercial financing. There are other regional players, but they don't operate on a national scale." Skeens said that the exit of competitors like National City Bank from the retail loan market several years ago, and the recent scaling back of other financial institutions' boat loan programs, demonstrates that an institution's size and long-term presence make a difference during lean times. "The margins have tended to be low in the marine and RV markets," said Skeens. "You generally have to be of a significant size to succeed. We've been doing this for 50 years, and have gotten very efficient at it. That's what it really amounts to." Williams told the Wall Street Journal that GE intends to stop providing new consumer loans for boat and RV purchases on August 1, 2008. The company will continue to service its existing RV and marine loan portfolio, valued at US$3.6 billion.
(6 May 2008)
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