NEW YORK (
) -- A couple of news items from last week raised questions about
's subprime mortgage lending strategy in Europe.
In a speech to graduates of
, GE CEO Jeff Immelt described Europe as "'teetering' on the brink of a financial disaster."
published three days later says General Electric has renewed lending to subprime borrowers in the United Kingdom.
A new U.K. subprime push by GE would be surprising indeed, not just in light of Immelt's comments and the general obviousness of problems in Europe, but because GE already took some sizeable hits in its U.K. mortgage lending business in 2008 and 2009.
However, GE spokesman Russell Wilkerson says GE never stopped extending new mortgage loans to U.K. subprime borrowers, and hasn't stepped up the practice this year. GE did about $100 million in new U.K. subprime loans in 2009 and expects to do roughly the same amount in 2010. These numbers are miniscule when you consider that GE Capital had $650 billion in assets at the end of 2009.
The only thing that has changed, Wilkerson says, is that GE is going after subprime borrowers with a slightly higher degree of creditworthiness.
Details are a bit fuzzy, but I didn't pursue it further as I'm inclined to give GE the benefit of the doubt here. The company is opaque in lots of ways. Like many others, it took some big risks leading up to the crisis, and its high-powered lobbying machine allowed it to catch several breaks so it can claim it never needed a bailout like
But a sudden, wild lurch into risky European home loans in 2010? GE just ain't that exciting, folks.
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Written by Dan Freed in New York