GM’s Finance Unit Has Own Online Bank — In Germany

Automotive giant General Motors Co., in what The Wall Street Journal said Thursday (Feb. 18) represented a move to help streamline funding costs and boost lending profits, is in the midst of running an Internet-based bank in Germany. It is also taking on retail deposits through that conduit. The operations have been up and running since September of last year.

The German unit brought in $1.3 billion in new funding last quarter and also had the boon of taking GM Financial’s dependence on unsecured lines of credit a bit lower.

The financial unit is taking deposits through Opel Bank, which loans money to car dealers and the people who buy from them.

As WSJ noted, the automaker had gotten out of the home lending and auto lending businesses under the terms of its bankruptcy and then got back in through buying AmeriCredit Corp. which then became GM Financial. The lending arm broadened through portfolios bought through GMAC/Ally Financial.

“Deposit-taking is a fairly well-established mechanism” to help access funding platforms, Barclays auto analyst Brian Johnson told WSJ. GM has said that it “offers overnight money and fixed-term deposits at highly attractive rates to German end customers via an easy-to-use online banking platform.”

The financial unit’s revenues have quadrupled since 2011, yet costs have kept earnings flat in 2014 and 2015.

Separately, the publication said that Ford Credit, owned by Ford Motor Co., has a retail operation that has been one of its most profitable businesses. That credit operation earned between $1.7 billion and $2.4 billion annually, even though it has a smaller footprint than GM as measured by sales and dealers, according to financial reports.