UPDATE:Santander To Buy $3.2B Citi Auto-Loan Portfolio

25th Jun 2010 01:06

(Adds background, calls to companies for terms not immediately returned) DOW JONES NEWSWIRES Banco Santander SA (STD, SAN.MC) and Citigroup Inc. (C) agreed to a deal Thursday under which the Spanish bank will buy a $3.2 billion automobile-loan portfolio from Citi and service another one worth $7.2 billion. Santander, one of the biggest banks in Spain, said it was paying 99% of the value of gross receivables in the portfolio it's buying. It expects the deal to close in the third quarter. Calls to both companies seeking terms of the deals weren't immediately returned. The plan comes after Citigroup had reportedly discussed selling the entire auto-loan unit, CitiFinancial Auto. The unit recently had about $16 billion in loans. Santander, the second-largest bank in Europe by market value after HSBC Holdings PLC (HBC, HSBA.LN, 0005.HK), posted modest profit growth in its most recent quarterly results, reporting strong growth in its Brazilian unit while it was hesitant about making loans in its Spanish home market. Spanish banks have been buffeted recently by a housing glut in Spain, which has forced some real-estate developers to fail, as well as fears a Greek credit crisis could spill over to weak European economies like its own. Citigroup shares were up 1.1%, at $3.82 in after-hours trading, while Santander's American depositary shares were up three pennies, at $10.90. -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [email protected] (END) Dow Jones Newswires June 24, 2010 20:06 ET (00:06 GMT)