HSBC Finance Corp. said Tuesday it will sell its auto loan servicing business and $1 billion in car loan receivables for $904 million. A cash deal has been reached with Santander Consumer USA Inc. It is expected to close in the first quarter of 2010. HSBC said it also plans to enter into a loan servicing agreement for the remainder of its U.S. auto loan portfolio, which is in liquidation. HSBC Finance's auto finance business had $7.7 billion in managed receivables as of June 30. Under the terms of the sale, HSBC's auto loan servicing facilities in San Diego and Lewisville, Texas, will be assigned to Santander and the majority of the 700 employees from those locations will be offered the opportunity to transfer to Santander beginning in the first quarter of 2010. Dallas-based Santander will provide servicing for the auto loans it purchases, as well as for the remaining HSBC auto loan portfolio. The agreement is an important step in reducing its finance portfolio and offering its employees opportunities with a company demonstrating a longer term commitment to the auto finance business, said Niall Booker, HSBC Finance CEO. HSBC Finance is a subsidiary of HSBC North America Holdings Inc. Santander began originating loans in 1997. It is a division of Banco Santander SA, an international commercial and retail bank with 91 million customers served by nearly 14,000 branches in its main markets. Shares of HSBC Holdings PLC rose $1.90, or 3.2 percent, to $60.20, a new 52-week high. Shares had traded between $22.89 and $59.96 in the past year. Shares of Banco Santander SA fell 16 cents to $17.01. |