GE Capital is facing the same dilemmas as the banks with which it competes - growth in lending volume is failing to convert into growth in assets.At a briefing for select media yesterday, on the group's aggregated financial results in Australia for 2010, management highlighted the issues."The problem is strong volume and slow asset growth" said Skander Malcolm, the newly promoted chief executive officer of GE Capital for Australia and New Zealand.Malcolm said GE lifted spending on research by 24 per cent last year, to help fashion a response to the changed behaviour of borrowers.On the consumer side, this confirmed the merit of key approaches such as interest-free offers with some retail partners (such as Harvey Norman) and the targeted offers that double the level of annual in-store spending when Myer One loyalty card-holders take out a Myer Visa card.On the business, as well as the consumer side, re-pricing of loans has lifted margins and supported earnings.GE Capital said the headline profit in Australia declined to A$442 million in 2010, from $475 million in 2009.The core profit, on continuing businesses, increased 19 per cent, to $682 million from $572 million.Lending assets declined by a quarter, to $14.8 billion, from $19.5 billion over the year, which is consistent with the re-positioning of the business since the financial crisis forced the group to pull out of some segments, such as dealer finance and most of its home loan activities.Revenue fell seven per cent, to $3.8 billion. Operating expenses declined by six per cent, partly as a result of staff cuts initiated two years ago.Asset quality improved over 2010 and has continued to improve this year.GE Capital provided the briefing for the third year in a row to cater to business media interest, and to overcome the limitations of its statutory accounts that cover around 100 reporting entities.