Santander to profit from sales of stake in US division

 

The Eurozone's largest Bank, Santander, announced last week that they stand to take a net profit of 727 million euros from the sale of part of its operation in its Santander Consumer USA unit.

The Bank said that the proceeds from the sale will be used to strengthen its balance sheet. The bank declared a core capital ratio of 9.25% at the end of June - ahead of the limits set in the latest round of EU Stress tests.

The sale will be carried out by Santander Consumer USA increasing its capital by approximately 827 Million euros, with Sponsor Auto Finance Holdings Series, an entity held by funds affiliated with Warburg Pincus, Kohlberg Kravis Roberts and Centerbridge Partners, investing 719 Million Euros in the company and Dundon DFS approximately another108 Million Euros. The transaction values the company at 2.87 Billion Euros.

Following the capital increase, Santander will have a 65% stake in Santander Consumer USA, Kohlberg Kravis Roberts, Warburg Pincus and Centerbridge Partners through Sponsor Auto Finance Holdings Series 25%, and Dundon DFS 10%. Santander Consumer USA booked a profit of 328 Million Euros