HSBC Agrees Sale Of $2.9B Auto Loan Book To Unnamed Buyer

2nd Aug 2010 12:26

By Patricia Kowsmann Of DOW JONES NEWSWIRES LONDON (Dow Jones)--HSBC Holdings PLC (HBC) Monday said it has agreed to sell a $2.9 billion portfolio of auto loans to an undisclosed buyer, in what would mark the complete disposal of a $4.3 billion auto loan book that is currently in run-off. HSBC in its first-half results said it sold the $2.9 billion loan book for about $2.7 billion. Along with about $490 million in debt being transferred along with the loans, the sale should result in net cash proceeds of $2.2 billion, it said, and a pretax loss of around $70 million when it completes in the third quarter. HSBC previously sold $1 billion in auto loans to a U.S. unit of Spain's Banco Santander SA (STD), along with its auto loan servicing operations. The auto loans are held in HSBC Finance, the U.S. consumer finance unit of HSBC that is largely in run-off. The unit stopped making home loans and auto loans after heavy losses in those portfolios and its only new lending is in credit cards. -By Patricia Kowsmann and Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; [email protected] (END) Dow Jones Newswires August 02, 2010 07:26 ET (11:26 GMT)