General Electric Co said on Thursday it is considering pulling out of the consumer lending business in Japan, as tighter regulation has crimped profits across the industry, but said nothing has been decided yet.
Yoshiaki Fujimori, GE's senior vice-president, said at a news conference the company was mulling various options for its Japanese consumer lending unit, known as Lake.
In terms of our plans for Lake, recently the economic environment and regulations have changed, so we are now considering how to deal with those changes, Fujimori said.
We are considering all options, including (pulling out), but nothing has been decided at the moment.
The Financial Times reported earlier this month that GE has sounded out financial institutions about acquiring or taking a stake in Lake. Those efforts to sell or find investors are still at an early stage, the paper said.
GE has closed 60 percent of its 115 manned personal loan branches in Japan and plans to cut up to 400 jobs by the end of this year as stricter regulations have eaten into profits.
A new lending law approved by Japan's parliament will lower the maximum legal interest rate to between 15 and 20 percent, depending on the size of the loan, from the current ceiling of 29.2 percent.
The change marks the latest challenge for the once-sprawling consumer finance industry, which has been already battered by scandals and borrower lawsuits over excessive interest charges.