Acquisition of GE Money’s Motor Finance Division
in the UK is to change hands as part of a wider deal, it was
announced.Banco Santander is to acquire the unit, along with GE Money’s UK
card business and the GE Money operations in Austria, Finland, and
Germany, which have combined assets of €9bn (£7.1bn) and are valued
at €1bn (£790m). The businesses acquired from GE will become parts
of Santander Consumer Finance and Santander Cards.
The majority of the GE Money portfolio – around 70 per cent – is
focused on motor lending, the bank said.
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In return, GE Commercial Finance is to acquire commercial
banking unit Interbanca from Santander. Interbanca came under the
Spanish bank’s ownership after the parcelling out of the assets of
ABN Amro, which Santander jointly bought in partnership with Royal
Bank of Scotland and Fortis.
Magda Salarich, senior executive vice-president and head of
Santander Consumer Finance said: “This transaction will enable
Banco Santander to continue consolidating Santander Consumer
Finance as a European leader in consumer finance.”
Final discussions between the two financial giants are still
underway, with completion of the deal subject to the two sides
reaching a definitive agreement and obtaining the necessary
regulatory approvals, Santander said.
Both GE Money and Santander declined to comment further and gave
no indication of when the deal will be closed.
A banking sector analyst, who did not wish to be named,
commented that the deal will allow Santander to achieve “critical
mass” in the European consumer finance market, with consequent cost
savings.
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By GlobalDataHe added: “It’s a great deal for Santander. It’s essentially an
asset swap, and what they’re doing is getting rid of an asset
that’s completely disconnected with the rest of the business,
Interbanca, and concentrating on a business which makes sense for
them, consumer finance.”
Timeline: GE Money’s automotive finance
business
1991:GE acquired the automotive finance
business of Mercantile Credit from Barclays.
1998: GE Capital Woodchester (GECW) launched
following GE Capital’s acquisition of Woodchester Investments plc –
an Irish-based financial services company.
Mar 1999: GECW exceeds £100m new business
advances for the month – a 36 per cent increase year-on-year.
Dec 1999: GECW launches GE Custom Finance, a
pilot programme for the non-prime finance motor sector.
2003: GE Consumer Finance UK purchases First
National Bank’s consumer finance business – but not its motor
finance business – from Abbey National for £848m.
2004: GECW closes its Borehamwood and
Manchester branches, with the loss of 30 jobs, to centralise
operations. GE Capital also owns around 25 per cent of the shares
of Lookers plc through its subsidiary GE Hamilton Finance.
2006: GECW re-brands as GE Money.
Motor Finance Issue: 42 – April 08
by Jo Tacon ,
Published for the web: April 23 08 10:39
Last Updated: April 24 08 15:46
