AIG 2006 Annual Report Download - page 37

Annual Report 2006 AIG 353535
In 2006, AIG Consumer Finance Group (CFG) achieved record
earnings in Poland, where it is a recognized market leader. Growth
strategies in Poland’s consumer finance market were focused on a
new credit card initiative, as well as the expansion of the personal
loan branch system. This latter strategy was also emphasized in
Mexico, where the group opened eight new branches in 2006.
CFG operations in Argentina achieved success and reported strong
receivables growth. During the year,CFG began establishing a pres-
ence in several new key markets. In China, a sales finance business
was launched, and in Russia, CFG applied for a banking license.
CFG also began laying operational groundwork in India, where AIG
received regulatory approval to operate a wholly owned non-bank
finance company that will serve as a platform to build a consumer
finance franchise. CFG did face challenges in some markets during
2006, and the group’s credit card income was adversely affected by
the industry-wide deterioration of consumer credit conditions in the
Taiwan card market.
In 2006, Imperial A.I. Credit Companies’ sustained investment
in technology to support its customer focused strategy enabled it to
extend its leadership position as the largest financier of insurance
premiums in North America. Its life insurance financing business,
focused on high-net-worth individuals, expanded its loan portfolio.
first venture into the international market. Strategically, AGF’s initial
efforts with Ocean will focus on expanding its real estate underwriting
and servicing expertise. Long-range plans call for expansion into
unsecured consumer lending and retail sales finance. Both are core
strengths in AGF’s U.S. operations. During the year,increases in
non-real estate loans and retail sales finance receivables were more
than offset by reduced revenues in AGF’s mortgage banking
operation as a result of the deterioration in the U.S. housing market.
The U.S. economy continued to expand during the year,and
unemployment remained low,which improved the credit quality
of AGF’s portfolio as compared to 2005.
Financial Services Financial Results
(in millions) 2006 2005
Revenues $ 8,010 $10,525
Operating income excluding FAS 133 gains (losses) 2,346 2,262
FAS 133 gains (losses)* (1,822) 2,014
Total operating income 524 4,276
*Represents the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange
gains and losses.
ILFC 2006 Revenues by Region
Total = $4.1 billion
Europe 46.1%
Asia and the Pacific 25.4%
United States and Canada 12.4%
Africa/ Middle East 9.8%
Latin America 6.3%