Sale of $2 billion mortgage business supports GE Capital's strategy to accelerate growth in core businesses
NORWALK, Conn.--24 December 2010-- GE Capital announced today the signing of an agreement whereby Grupo Financiero Santander Mexico will acquire GE's consumer mortgage business in Mexico, encompassing all of its operations, including its $2 billion consumer mortgage portfolio.
Financial terms were not disclosed and the transaction, which requires customary regulatory approvals, is anticipated to close in the first half of 2011.
Headquartered in Mexico City, GE Capital has provided consumer mortgages in Mexico since 2002. Its consumer mortgage business has been part of GE Capital's Restructuring Operations organization since early 2009.
"This sale is consistent with our strategy to exit non-strategic businesses that lack scale to help reduce GE Capital's balance sheet while investing in core industrial and commercial finance platforms, including in Mexico. Our team in Mexico has done a great job managing the mortgage portfolio and will be a good fit with Santander," said Mark Begor, President and CEO of GE Capital, Restructuring Operations.
"This acquisition is evidence of Santander's confidence in Mexico, and is consistent with Santander's strategy in Mexico of investing in the strengthening of our franchise, investing in the country, and the implementation of strategies that would allow us to continue growing in this market, particularly in products that assist in the wellbeing of Mexican families, such as in the case of mortgage loans. This acquisition will make us the second leading provider of mortgages in Mexico," said Marcos Martínez Gavica, Executive President of Grupo Financiero Santander.
Mexico remains an important market for GE and GE Capital, which continues to be a leading provider of commercial lending in real estate, equipment and aircraft financing, transportation, structured and technology finance, and working capital. With 114 years of presence in Mexico, GE and its affiliates employ more than 35,000 people in the country. In October 2010, GE announced $60 million in investments in new projects that will create 500 new jobs throughout the country.
About GE Capital:
GE Capital (NYSE: GE) is one of the world's largest providers of credit. For over one million businesses, large and small, GE Capital provides financing to purchase, lease and distribute equipment, as well as capital for real estate and corporate acquisitions, refinancings and restructurings. For our 100+ million consumer customers, GE Capital offers credit cards, retail sales finance programs, home, car and personal loans and credit insurance. For more information, visit gecapital.com or follow company news via Twitter (@GECapital).
About Santander:
Grupo Financiero Satander S.A. (SANMEX) is one of the most important financial groups in Mexico, with a total asset value as of 9M10 of $774 billion pesos, with a participation in the market in business volume and deposits of 13%. It has 1,093 offices in the country, 11,761 employees and provides services to 9 million clients.
Banco Santander (SAN.MC, STD.N, BNC.LN) is a commercial bank with its head office in Spain and presence in 10 principal markets. At the end of 2009, Santander was the first bank in the euro zone for stock capitalization and the fourth in the world for benefits. Founded on 1857, it has € 1,245,420 millions in management. Santander has 92 million clients, 13,907 offices -more than any other international bank- and 176,471 employees. It's the main financial group in Spain and in Latin America, and has leadership positions in the UK and Portugal. Additionally, it has a broad presence in Europe through its Santander Consumer Finance unit and in the northeast of the US through Sovereign Bancorp. During 2009, Santander registered net benefit of €8,943 million. During the first 9 months of 2010, it registered a net benefit of €6,080 millions euros.
In Latin America, Santander services its customers through its 5,784 offices. As of December 2009, Santander obtained a net benefit of €3,833 millions. During the first 9 months of 2010 it registered a net benefit of €3,482 millions euros.
Stephen White