American giant GE leaves Romanian financial services market

American GE Money, the financial services division of giant General Electric, has decided to leave Romania after five years during which it invested over 100 million euros, but without visible results.
The exit amounted to selling a 30% stake in GE Garanti Bank to Turkish partners Garanti plus similar stakes in non-bank financial companies Motoractive (leasing), Ralfi (consumer finance) and Domenia (mortgage loans).
"Our withdrawing from this partnership is part of GE's global strategy," said Dmitri Stockton, president of GE Capital Global Banking.
This consolidation brings the Turks to 1.5 billion euros in assets on the Romanian market, strengthening their position as a medium-sized player, after they started out as a small player four years ago.
"There will be no change as far as our strategy and development perspective are concerned," said Ergun Ozen, president and CEO of Turkish group Garanti.
There are no data available on the value of the transaction, but GE entered the market via a triple acquisition made in 2005 worth 140 million euros and then announced plans to invest 50 million dollars.
This is the biggest withdrawal from the market of a financial services player since the outbreak of the crisis more than two years ago, with the move being all the more relevant considering the weight of the GE name. The American financial industry will therefore only be represented by Citi. Last year Belgium's KBC Consumer Finance also left the Romanian market.
GE Money came onto the Romanian market in 2005, when lending was starting to take off, and bought from the Romanian-American Equity Fund (RAEF) the stakes it held in leasing company Motoractive, in Ralfi (which sold consumer loans under the Estima Finance brand) and in mortgage loan company Domenia Credit. They also bought the 20% stake held by DoMo retailer in Ralfi, with the overall value of the transaction being estimated at 140 million euros.