A Dearth of Buyers for GE?s Store Card Group: WSJ

General Electric Co. is having trouble finding a buyer for its $35 billion private-label credit card subsidiary, according to a story in yesterday’s The Wall Street Journal. The newspaper reported that JPMorgan Chase decided it wasn’t interested in the unit of the GE Money group, though the big bank has been bulking up its retail card portfolio in recent years.

Timing for the sale has been lousy as the financial industry slogs through a miasma of losses and tight money. This has kept such suitors as Citibank, Bank of America, HSBC and Capital One from putting up a bid, according to observers.

GE Chairman Jeffrey Immelt announced last year he would like to either sell the division or find an investor partner (“GE Puts Private Label Card Unit on the Block,” Dec.13, 2007). Immelt said he would like to sell the division by the fourth quarter of this year.

The division was the leading store card issuer in 2006 with outstandings of $35.5 billion, charge volume of $63.2 billion, and 50 million active accounts, according to The Nilson Report a newsletter covering the payments industry.

The Journal noted that GE has a 40 percent market share of the store-card market with such well known brands as Wal-Mart Stores, Lowe’s, Brooks Brothers, Ikea and Dillard’s.

The division is seeing losses on the card portfolio rise, further reducing its draw. The Journal cites numbers from analyst Keefe, Bruyette & Woods that GE’s securitized card portfolio reported charge offs of 8 percent in May, up from 5.17 percent in May 2007. Thirty-day delinquencies rose to 4.82 percent in May from 4.05 percent in April.