Santander unit to buy Citi loan portfolio

MADRID: A US unit of Spain's largest bank, Banco Santander, reached an agreement with Citi's to acquire $3.2 billion of CitiFinancial Auto's auto loan portfolio, Santander Consumer USA said on Thursday.

Santander and Citi also reached an deal in which the Spanish bank's unit would manage a portfolio of Citi's auto loans worth $7.2 billion which would be retained by the US group. Terms of the two deals were not disclosed. The sale was consistent with Citi's strategy to reduce the assets and businesses within Citi holdings and would not have a material impact on its net income.

The transaction is expected to close by the end of the third quarter, Santander said. Citigroup is looking to shed some $500 billion of assets, either through selling them or winding them down, though some units and loans have proven difficult to sell with few offers for a $50 billion portfolio of retailers' credit card loans.

The US bank has also reduced the assets it is looking to shed by about $100 billion over the last year. Earlier on Thursday, Santander said an affiliate had offered around $56 million for part of the capital it does not already own in Puerto Rico Santander Bancorp. Santander will acquire 9.4 percent of the group for $12.69 per share, it said.