seeks to turn financing unit into a bank: source
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[February 17, 2014]
MILAN (Reuters) — Fiat <FIA.MI>, which
has agreed to take full control of U.S. unit Chrysler, has asked the
Bank of Italy's permission to turn financing unit Fga Capital into a
bank to cut funding costs, a source with direct knowledge of the
Winning a banking license would make Fiat more competitive against
rival car makers such as Volkswagen <VOWG_p.DE> and Peugeot <PEUP.PA>,
which already have their own internal banks and were able to access
cheap loans offered by the European Central Bank (ECB) during the
euro zone crisis, the source said.
"Fiat was not able to access ECB funds during the two Long Term
Refinancing Operations because it did not have a bank," the source
told Reuters on Sunday, confirming a report in Italian newspaper Il
Sole 24 Ore.
The source said the request for a banking license was presented to
the Bank of Italy earlier this year.
Fga Capital was set up in 2006 as an equal partnership between Fiat
and French bank Credit Agricole <CAGR.PA>, which also has a large
retail banking network in Italy.
Last year, Fiat and Credit Agricole extended their joint venture to
the end of 2021.
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Fiat has high funding costs given its 'junk' credit rating and is
looking for solutions to cut costs and thus improve margins.
Fiat declined to comment. The Bank of Italy was not immediately
available for comment.
(Reporting by Lisa Jucca; editing by
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