Banco Santander (STD) has agreed to purchase Citigroup, Inc (NYSE: C)’s loan portfolio in a deal announced on Thursday, in which the Spanish bank will purchase a $3.2 billion automobile-loan portfolio from Citigroup, Inc (NYSE: C) and service another portfolio for $7.2 billion.
Santander, one of the largest banks in Spain, said that it would pay 99% of the gross value of the receivables in the portfolio it’s purchasing. The deal is expected to be finalized during the third quarter.
The sale comes after Citigroup, Inc (NYSE: C) recently discussed selling its entire auto-loan unit, CitiFinancial Auto, which has about 16 billion in loans.
Santander, the second largest bank in Europe in terms of Market Value, posted modest growth in its second quarter earnings results as a result of strong growth in its Brazilian unit. Banco Santander has been hesitant to make loans in its home county of Spain, which has recently been hurt by a housing glut. Some real estate developers have failed in the country and there are also fears that Greece’s credit crisis could spill over into its own.
Citigroup shares were up 1.1%, at $3.82 in after-hours trading on Thursday, while Santander’s American $0.03, at $10.90.
