GE Money to shed Melbourne processing jobs

THE home-lending arm of GE Money is closing part of its back-office processing operation in Melbourne and moving the work to Sydney, which could involve the loss of up to 50 jobs.

The company confirmed yesterday that it was in negotiations with affected staff whose work will be transferred to what will become GE's sole mortgage processing centre by mid-June. It is thought the cuts could affect up to 10 per cent of the division's 550 staff, although the company refused to confirm the actual number of jobs under threat.

The impact could eventually be offset by an increase in the number of staff in Sydney, although GE indicated it had no need to boost numbers for the rest of this year.

GE Money is part of the giant US financial services combine that also owns the Wizard home loans business.

Moving the processing work to Sydney does not affect Wizard, which is run as a separate division to GE Money's other mortgage operations.

The company emphasised that the move to reduce its in-house processing operations from two centres to one was unrelated to the fall-out from the global credit crunch, which has resulted in funding costs rising dramatically throughout the home loans industry.

Neither was liquidity an issue, it said, given that the Australian division borrows directly from GE's main treasury in New York to fund its three main specialist home loan products, two of which are sold directly under its own name.

However, its savings drive comes at a difficult time for the wider mortgage industry. Non-bank lenders, in particular, have either been driven out of the market or have drastically cut back on their business because of the need to increase interest rates in the face of the credit crisis.

Prominent Australian casualties of the credit crunch include the RAMS mortgage lender, now a relaunched division of its new owner, Westpac bank. The Origin home loans origination business run by ANZ has in effect been closed and Macquarie Mortgages is also in the process of being shut down.

Danny John | The Age | 8 May 08