General Electric Company (GE)

• Article
• Discussion
• Edit
• History
• Bookmark

[edit] Products and Services

GE Commercial Finance Revenue Trend

GE's Commercial Finance division provides various financial services and products to a range of commercial customers. Specifically, Commercial Finance offers loans, financial management advice, and equipment leasing, all of which are aimed at promoting business expansion. Commercial Finance's assets total over $230 billion, making it the largest of GE's finance businesses.

Commercial Finance offers:

• Capital Solutions
  • Business financing solutions for companies that require large amounts of capital, especially for mergers and acquisitions.
  • Financing solutions for government and municipal entities.
  • Auto and corporate aircraft fleet financing, leasing, and management systems.
  • Business solutions for tax-exempt businesses and non-profits.
  • Asset sales, including construction and mining materials, manufacturing equipment, marine vessels, media/broadcasting equipment, printing and publishing equipment, restaurant real estate, and previously owned transportation vehicles.
  • Commercial real estate sales, including manufacturing facilities.
• Corporate Financial Services
  • Concentrates on lending money for companies to operate, grow, or restructure.
• Healthcare Financial Services
  • Concentrates on healthcare-related financing and specialization training for doctors who are new to the practice.
• Real Estate
  • Provides financing for a variety of real estate ventures, including the construction and purchase of housing, bridges, golf courses, etc.

[edit] Trends and Forces

GE Commercial Finance is very well diversified, with its assets spread across 66 industries. As such, poor performance in any one of them would have a limited impact on Commercial Finance's performance.

[edit] Real Estate Market

The division is most exposed to the real estate market, which accounts for around 13% of its total assets. Because Commercial Finance accounts for around 44% of GE's total assets, fluctuations in real estate prices can impact the value of GE's assets overall. In 2006, Commercial Finance's real estate investments gained 76% as a result of higher property values.

[edit] Interest Rates

Rising interest rates can have several effects on GE's Commercial Finance division. In terms of real estate, a rise in interest rates makes borrowing money more expensive, which can lead to a slowdown in the housing market and lower property values. Changing interest rates can impact the value of Commercial Finance's sizable real estate holdings. Interest rates' effects aren't limited to the real estate market, however. Higher interest rates generally result in lower consumer spending across the board, which can impact both the value of Commercial Finance's assets and demand for its services. Lower interest rates, though they're generally used as a tool to jumpstart a sluggish economy, would likely benefit GE by increasing consumer spending. Despite this, GE Commercial Finance does not rely on capital markets to raise cash for lending, instead this division lends money earned elsewhere by GE.

[edit] Competition

The broad range of services offered by GE Commercial Finance makes it somewhat difficult to compare to other companies. Two companies that target a similar market are Citigroup (C) and CIT Group Inc (DEL) (CIT). These firms both offer a variety of services for commercial customers, including financing, leasing options, and financial management solutions.

Note: This chart includes total revenues and income for Citigroup and CIT Group Inc. The data for GE is specific to the Commercial Finance segment.