GE Money’s mortgage business reported a loss of $5.7 million in the year to December 2007 — a massive turnaround from a profit of $70.3 million in 2006.

Whether outsiders can have a lot of confidence in the statutory financial statements of this half of the GE Capital business in Australia is uncertain.

According to the financial statements loans and advances increased by 21% to $17.8 billion over calendar 2007, or close to double the rate of asset growth in residential lending of the rest of the market.

The profit and loss statement shows that net interest income increased 31% to $144 million. This is the sort of top-line revenue which would be the basis of a profit rather than a loss by most money lenders.

One explanation for the loss is that fees and commissions received by GE Money Mortgages fell 29% to $119 million.

Exacerbating the loss is that fees and commissions expenses incurred increased by 29% to $164 million.

These highlights suggest there’s a stack of transactions that are internal to the GE Capital group wrapped up in this subsidiary (which, admittedly, appears to hold all the mortgage assets) but whether the revenues and earnings provide any guide to the underlying business is unclear.

Separate financial statements for Wizard Home Loans show this subsidiary of GE Capital of $18.1 million in the year to December 2007, down by 8%.

Whether there’s much insight from the financial statements of this entity is doubtful; they show loans of only $350 million, or less than 3% of the mortgage book acquired by GE three years earlier.

GE Capital’s competitors will soon know the true financial position of their rival.

GE is considering options for the sale, joint venture of partnership of its mortgage financing business in Australia.

Citigroup and JP Morgan are assisting GE in that sale.