Banco Santander SA, Spain’s largest home and car loan lender, has purchased a portfolio of auto loans from London-based HSBC Bank.
According to Reuters, Santander paid $4 billion to take over existing loans with a face value of $4.3 billion from HSBC. Bad loans from HSBC made the company unprofitable, so the bank has largely closed off its car loan business. After closing off customers from obtaining new loans earlier in the year, selling off the existing loans is the last step in the company’s restructuring.
Santander, meanwhile, has expanded its lending business internationally after a reduced demand in its home base of Spain. The company has bought loans and lending companies in various countries, including France, Germany, Brazil and the U.S.
HSBC announced that thanks to jettisoning its lending unit, the company was able to double its first-half net income as compared to 2009 as it returned to profit for the first time in three years.
Although HSBC has backed out of the car loan game, it seems that Santander is eager to take its spot, which could mean another source for those with bad credit in the market for auto loans.