Citizens Financial Group Inc. is dialing back the volume of auto loans it purchases from Santander Consumer USA, while increasing the “organic” loans its Citizens One Auto Finance unit originates itself, which now account for about 80% of the bank’s auto volume.
“We purchased $2 billion in auto last year,” said Bruce Van Saun, chairman and chief executive of Citizens Financial, a Providence, R.I.-based regional bank. The bank is expanding its indirect auto loan business in 43 states, via more than 7,000 U.S. dealerships, targeting customers with prime and super-prime credit.
“We are going to target that at $1.5 billion this year because we are seeing, I think, really good growth in organic auto, as dealers increasingly accept us to handle the full credit spectrum, including prime customers,” Van Saun said in a conference call last week.
“So SCUSA was always viewed as a bridge until we were in that position,” he said.
In 2014, SCUSA sold $1.7 billion of loans to Citizens, as part of a flow agreement in which Citizens committed to buy up to $600 million per quarter of Chrysler Capital prime loans through May 2023, according to SCUSA’s 2014 annual report filed with the Securities and Exchange Commission in March.
A SCUSA spokeswoman said the lender had no comment on the Citizens statement.
As of June 30, Citizens had $13.7 billion of auto loans outstanding, up from $11 billion a year earlier.
