HSBC sells US auto finance units to Santander

[August 31, 2010]  LONDON (AP) -- British bank HSBC Holdings PLC said Tuesday it has sold its last U.S. auto finance businesses to Spain's Santander for about $3.56 billion in cash, completing its exit from a market that cost it billions during the financial crisis.

On top of the payment, the Santander Consumer USA Inc. unit is assuming $431 million in debt, HSBC said. The loan book acquired by Santander was valued at $4.3 billion.

The deal follows a similar move in March, when Santander acquired $1 billion in auto finance loan receivables from HSBC.

HSBC came to grief in the United States through its $14 billion acquisition of Household International Inc. in 2002, which made HSBC the biggest subprime lender in the United States.

The company wrote off billions in losses on dud U.S. loans in the global credit crisis. It announced in March last year that it would stop making consumer loans in the United States and would wind down the consumer lending business by 2014.

In the first half of this year, HSBC reported it was still losing money in the United States -- $74 million on a pretax basis compared to a loss of $3.9 billion a year earlier. The company has cut its North American payroll to 34,000 by midyear, down 3,000 from a year earlier.

HSBC shares were down 1.1 percent at 630 pence in early trading on the London Stock Exchange.

[Associated Press]

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