Exclusive: UBS to bid for GE's Swiss lending unit - sources
By Oliver Hirt | December 5, 2012 4:00 AM EST
U.S. group General Electric wants to sell its Swiss consumer lending business and UBS is a possible bidder in a deal that could be worth up to 1.5 billion Swiss francs ($1.6 billion), sources said.
Swiss bank UBS is one of at least two parties who planned to submit bids for GE Money Bank in an auction process, two people familiar with the matter told Reuters on Tuesday.
"GE wants to finalise the sale ... by the end of the first quarter," one of the sources said.
Zurich-based GE Money Bank Switzerland employs more than 700 people, has 25 branches and is active in personal loans, vehicle financing, credit cards and insurance services recording a profit of 135 million francs in 2011. Swiss consumer lending is estimated to be a 15 billion franc market in loan volume.
Neither GE Money Bank nor UBS would comment.
Under GE chief executive Jeff Immelt, the largest U.S. conglomerate has been selling non-core assets, such as a $1.5 billion stake in Thailand's fifth-largest lender Bank of Ayudhya which is also on the block.
At the start of the financial crisis, GE sold its consumer credit business in Austria and Germany to Spanish bank Santander.
If UBS were to buy the Swiss unit it would be the first deal of note for Switzerland's biggest bank since the financial crisis, when it ran up $50 billion in subprime losses and took a Swiss government bailout in 2008.
Its last major acquisition was of Brazilian investment bank Pactual for about $3.1 billion in 2006. UBS was forced to sell the bank in 2009 to raise capital.
A deal would be the biggest in the Swiss banking industry since Swiss private bank Safra bought cooperative Rabobank's controlling stake in Bank Sarasin for 1.04 billion francs.
A UBS purchase of GE Money Bank would confirm its stated desire to refocus on its home market as it scales back in investment banking.
In October, UBS said it had earmarked 1.5 billion francs for investment across all businesses over the next three years and was to cut 10,000 jobs in a retreat from many fixed-income activities.
Swiss financial markets regulator FINMA said last week it had banned UBS from making any acquisitions in the investment banking business after a trading scandal last year cost the bank $2.3 billion.
UBS, which offers retail banking services in Switzerland and business loans and mortgages, is not active in consumer lending, a market dominated by GE Money Bank, Credit Suisse's BANK-now unit and Cashgate, jointly run by Swiss cantonal banks and cooperatives Raiffeisen, Migros and Bank Coop.
($1 = 0.9264 Swiss franc)
(Writing by Katharina Bart; Editing by Dan Lalor and David Holmes)
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- Lunch with the Gods: Pope Francis Eats with Vatican Workers in Cafeteria
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Transfer News: Ron Vlaar to Consider Villa Exit, May Move to Tottenham
- AS Roma's Seydou Keita Throws Water Bottle at Real Madrid defender Pepe for Spitting [VIDEO]
- The Mentalist Season 7 Spoilers: CBS Skips Simon Baker's Patrick Jane in Fall Schedule, Josie Loren Joins Cast
- Game of Thrones Season 5 Update: Maisie Williams Talks Arya Stark, Lady Stoneheart, and Surprises
- Transfer News: FC Barcelona, Man Utd to Compete for Juan Cuadrado's Signature as Fiorentina Reveal Willingness to Sell