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American giant GE leaves Romanian financial services market

Autor: Liviu Chiru

17.12.2010, 00:11 30

American GE Money, the financial services division of giantGeneral Electric, has decided to leave Romania after five yearsduring which it invested over 100 million euros, but withoutvisible results.
The exit amounted to selling a 30% stake in GE Garanti Bank toTurkish partners Garanti plus similar stakes in non-bank financialcompanies Motoractive (leasing), Ralfi (consumer finance) andDomenia (mortgage loans).
"Our withdrawing from this partnership is part of GE's globalstrategy," said Dmitri Stockton, president of GE Capital GlobalBanking.
This consolidation brings the Turks to 1.5 billion euros in assetson the Romanian market, strengthening their position as amedium-sized player, after they started out as a small player fouryears ago.
"There will be no change as far as our strategy and developmentperspective are concerned," said Ergun Ozen, president and CEO ofTurkish group Garanti.
There are no data available on the value of the transaction, but GEentered the market via a triple acquisition made in 2005 worth 140million euros and then announced plans to invest 50 milliondollars.
This is the biggest withdrawal from the market of a financialservices player since the outbreak of the crisis more than twoyears ago, with the move being all the more relevant consideringthe weight of the GE name. The American financial industry willtherefore only be represented by Citi. Last year Belgium's KBCConsumer Finance also left the Romanian market.
GE Money came onto the Romanian market in 2005, when lending wasstarting to take off, and bought from the Romanian-American EquityFund (RAEF) the stakes it held in leasing company Motoractive, inRalfi (which sold consumer loans under the Estima Finance brand)and in mortgage loan company Domenia Credit. They also bought the20% stake held by DoMo retailer in Ralfi, with the overall value ofthe transaction being estimated at 140 million euros.

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