A surge in profits in
consumer lending and commercial leasing helped GE Capital grow net
earnings by 11 per cent for the three months to March 31,
2011.
After tax, earnings for the
first quarter of the year stood at $1.83bn (€1.25bn), compared to
$1.64bn in the fourth quarter of 2010.
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Compared to the first quarter
of 2010, earnings made a staggering leap, up from just $152m during
the corresponding three months in the prior year, its consolidated
results show.
GE Capital, the finance arm
of General Electric, said growth was driven mainly by strong first
quarter results at the company’s consumer lending unit, which saw
overall profit reach $1.26bn, compared to $556m during the first
quarter of 2010.
The commercial lending and
leasing business also performed well, with earnings soaring by 139%
to $554m for the quarter.
However, other units did not
perform as well. GE Capital’s real estate business suffered losses
of $358m, although this was an improvement on the prior-year first
quarter loss of $403m.
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By GlobalDataThe Energy Financial Services
business suffered a drop in profit of 27%, totalling $112m for the
quarter, compared to $153m in Q1 2010.
Profit at GE Capital Aviation
Services was also slightly down, dropping 3% to $306m.
Revenue for GE Capital as a
whole totalled $13.1bn, up 5% year-on-year, and 3% compared to the
fourth quarter of 2010.
The financial impact of the
earthquake and tsunami in Japan was described as minimal, although
commercial real estate valuations are being monitored.
The company said its balance
sheet was “safer and stronger”.
GE chairman and CEO Jeff
Immelt said: “GE Capital had an extremely strong first quarter,
earning $1.8bn after tax.
“With losses having peaked,
we are originating new business at attractive margins and our
funding costs continue to be favourable.
“Reserve coverage decreased slightly in the quarter,
driven by improving portfolio quality.”
