The General's electric first lieutenant

Jim Cock calls GE's presence a vote of confidence. Picture / Paul Estcourt

Jim Cock hadn't been fishing for 30 years until he left Australia for New Zealand to head the local arm of American giant General Electric's consumer finance business.

Five minutes after heading out on the water with some local colleagues, Cock was catching fish as a pod of orca swam past, all within sight of GE Money's downtown Auckland headquarters.

"I could not believe it. Stuff like that is ridiculously good. I think Kiwis are understanding more and more how good they've got it here."

But Cock says the lifestyle and environment is just one of two reasons he loves what has been his home for the past three years.

"I love the business environment here. Even though it's close to Australia, it's such a different market. There are so many little things, little nuances that make doing business unique to here. It's a competitive market and I think there's heaps of scope for growth. That's what GE wants me to do with the business and I think this is a fantastic place to do it."

GE Money, backed by the financial clout of its parent, General Electric, is being tipped as a potential threat to the dominance of the big banks on both sides of the Tasman. But, in terms of progress so far, the local and more recently established consumer finance outpost of the world's biggest listed company is lagging behind its Australian counterpart.

Cock, who has had a varied career with GE Money spanning almost a decade, has high hopes the Australian arm's progress will be matched here. He says GE Money's recent acquisition of Pacific Retail Finance shows there are plenty of opportunities for the company to grow.

However, GE Money had a fairly slow start in New Zealand back in the 1980s, only reaching what Cock calls critical mass with the acquisition of transtasman hire purchase outfit AGC in July 2002. That added to the 80 staff and $100 million worth of assets the company had here through its purchase of another personal finance company, Avco, in July 1999.

"When we bought AGC here in New Zealand it came with a head office infrastructure so we could run a business in New Zealand using that. I'm lucky that when we bought the AGC business, it came with a leadership team, and most of those are still here and they're passionate about the business."

Cock's job when he arrived was to get the business "looking and feeling more like a GE business, to try and introduce a few GE disciplines and overlays". That involved introducing GE's financial reporting standards and connecting the businesses to GE's global network.

"There are business like mine here in 47 countries around the world. If I need to yell for help, there's a lot of resources I can call on."

GE Money, formerly GE Capital, has its roots in the Depression when the parent company wanted to finance customers' purchases of its fridges and other appliances. It has since grown into the world's largest non-bank financial institution.

Cock says GE Money Australia has grown enormously in the nine or so years since he joined. In 1997, it had about 300 employees, now it has about 4000. The aggressively acquisitive company has built up an asset base of A$32 billion ($35 billion) through credit cards, mortgages, personal loans and insurance businesses and has about 3.5 million customers.

"The Australian growth story is a good one, now being mimicked by the New Zealand growth story," Cock says.

GE Money's growth in both countries was boosted by its October 2004 purchase of Australian Financial Investments Group. The company consisted of two parts:

* A retail arm which goes to market as Wizard and has 37 branches throughout New Zealand.

* The other part, AMS, is more like a wholesale mortgage provider "which actually manufacturers the mortgage product and also distributes through various broker networks as well".

Cock said: "It's still pretty small, we're effectively a new entrant. I'm not sure what the latest figures are but you could call it a couple of per cent but looking to grow as much as we can."

That growth will undoubtedly be helped by the competitive advantage GE Money has in accessing relatively cheap funds from its parent.

Cock says GE's triple A credit rating is "the envy of most banks", and several commentators say it's the banks GE is gunning for in Australasia.

Recently it was reported that GE Money planned to launch a retail banking operation in Australia within two years. GE Money Australia chief executive Tom Gentile said the company had begun applying for an Australian banking licence. Gentile has, in the past, said banking was "a huge part" of GE Money's global strategy "and it will be part of our global strategy here in Australia".

In Australia, GE Money is close to being the No 1 credit card offerer, thanks largely to its purchase of the Coles Myer in-house credit card business. In New Zealand, none of GE's purchases have landed it a credit-card business "but clearly it's something we would look to introduce".

Moreover, GE Money "certainly would" look to take deposits in New Zealand at some point in the future.

"There's certainly attractive things about taking deposits in the local market," Cock said. "You have a different relationship with customers through having a deposit base."

However, with what Cock acknowledges is an "extraordinarily competitive" banking and financial services sector here, it will be a while before GE Money NZ goes head to head with the banks. Nevertheless, substantial opportunities are available.

"We're still small - having said that we are interested in pursuing niches. We like to innovate with product as much as we can. We think there's still a lot of interesting things we can do in the finance market here.

"I'm not saying we're interested in just competing against finance companies or just competing against banks, we want to have a broad range of financial offerings that we can distribute and offer to as many New Zealand customers as possible."

GE Money NZ will continue to be acquisitive. "If there are increased opportunities out there, you can be sure we'll be out there looking."

This week, the company's purchase of Pacific Retail Finance for a reported $145 million went unconditional. The acquisition of New Zealand's third-largest consumer finance firm gives GE Money a $500 million portfolio of personal loans and distribution deals with retail chains including Noel Leeming, BBQ Factory, Retravision and Freedom Furniture.

"I'm incrementally excited about the fact that we're doing the Pacific Retail acquisition," said Cock. "It gives us more product, it gives us more critical mass ... it gives us a much bigger base from which to organically grow what we have here."

However, he also says GE Money is not just about buying businesses.

"We really do like to grow these businesses that we've bought and we're proud of the fact that we've been able to do that here. We have $3.5 billion worth of assets and if we don't buy another thing, I expect that to grow double digit every year.

"I tend to not look in the rear view mirror, but after we've completed the PRF acquisition, you add that plus Wizard plus the growth that we've had in businesses we had here when I arrived and it's a nice looking set of graphs, better than I would have imagined. That's the thing that constantly amazes me about GE, we set all these crazy goals to grow and we actually finish up quite often exceeding them."

PRF had financed much of its loans through the issue of debentures but GE Money will draw on cheaper funding from its overseas parent. But Cock doesn't believe the loss of PRF debentures is material for local investors.

"It's relatively small in the scheme of the investment market. Arguably it's already been absorbed. The news has been out there for a while. I think people have found other areas to invest in."

Moreover, he believes GE Money's presence in New Zealand is good news for the economy.

"We're spending money here and we're looking to grow these businesses, so we're creating a lot of jobs.

"GE can invest its money anywhere it likes in the world. The fact that it's invested most recently in New Zealand is a fantastic vote of confidence for not only the people who run the business here but for the economy itself."

Jim Cock

42
Married to Louisa.
Three children aged 4, 6 and 9.
Education: Degrees in law and economics from Adelaide University.
Career: Banking and finance lawyer at Minter Ellison in Melbourne before joining GE Money in 1997.