Santander Consumer USA is further entrenching itself in the sector with a $904 million purchase of HSBC Finance Corp.’s auto loan servicing business and $1 billion of receivables.
The acquisition, announced yesterday and slated to close in the first quarter of 2010, would include HSBC’s loan servicing facilities in San Diego and Lewisville, Texas. Most of the 700 employees at the two locations will be offered jobs with Santander.
While the deal marks HSBC’s official exit from the auto sector — a move on the drawing board for nearly two years — it also points to Santander’s efforts to expand servicing capabilities and climb the ranks among the nation’s top financiers. Santander currently originates loans under the Drive and Santander Auto Finance brands. It will be interesting to see how the company leverages its newfound service centers.
Separately, I wonder how long it will be before HSBC reenters the auto finance space. Guesses, anyone?