The 50:50 joint venture business will initially offer credit cards and personal finance products and commence operations during 2015, subject to obtaining the relevant regulatory licenses and approvals.
The news comes after months of speculation over Coles plans to bolster its financial services arm and potentially enter the mortgage market.
“A joint venture is a logical next step for Coles to expand into financial services, building on the success of Coles No Annual Fee and Rewards credit cards,” Coles finance director Rob Scott said.
Rachel Cobb, GE Capital Australia and New Zealand managing director consumer finance, said GE is delighted to expand its longstanding relationship with Coles to build a long-term partnership that will leverage the capabilities of both organisations and will create innovation in the market with a strong growth potential.
The existing 400,000 Coles MasterCard customer accounts will form part of the new joint venture, representing close to $800 million in credit card receivables.
Coles Insurance products including motor, home and life insurance will be outside the scope of the Joint Venture.
The establishment of the joint venture is subject to formalising the memorandum of understanding and relevant regulatory approvals.
More to come.