HSBC has announced the sale of a portfolio of US car loans to Santander, the acquisitive Spanish banking group, for about $4bn (£2.6bn) in cash and assumed debt.
The deal represents a further scaling down of the British bank’s ill-starred involvement in US consumer lending, which went sour when the subprime lending market imploded.
HSBC said the total consideration for the loans was about $3.56bn in cash, which had a carrying value of $4.3bn at the end of June. Santander was also assuming about $431m in debt, it added.
Santander had already taken over the part of HSBC’s US car finance business that actually services the loans following a deal struck last November.
That transaction – which incurred a $77m loss for HSBC – also involved the purchase of $1bn of car loans.
The Financial Times reported in early August that the Spanish bank had reached a preliminary agreement to follow up that deal with the $4bn loan portfolio purchase.
Earlier this month, Santander announced the purchase of 318 Royal Bank of Scotland branches for £1.65bn.