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?
Does GM still own 51% of GMAC?
I was an employee of the HSBC Auto Finance division and I would predict “never”. The Auto Division closed in August of 2008. The employees were told the bank could get better returns in emerging markets. It is a London based bank. I am curious what returns they produced during the last year. The San Diego and Lewisville offices were closed at that time. Your article says the acquisition include’s HSBC’s loan servicing facilities and most of the 700 employees at the two locations. You may need to re-check this information. Unless it was all a big conspiracy to get rid of me and they are secretly in business.
Thanks for the comment, Larry. Weren’t there people left to service the portfolio, though? At the time, the portfolio was more than $10 billion, I believe. I knew originations was shut down, but I thought servicing was left largely intact.
Marcie, Thanks but I was being a little sarcastic. HSBC had a little over 800 employees in the auto division. It may be they kept some to service the portfolio but I doubt they kept 700 out of 800. At any rate, I would be suprised if they came back into the US market. It sounds good for Santander but I am still out of a job.
I didn’t realize there were 800; I thought there were a couple thousand auto employees overall (but maybe that was a couple years back).
Yes there was several thousand employed and that were let go. Not sure of the number of loan servicing employees that stayed on, but it was a small skeleton crew compared to the total employed while still operating.
I worked with Larry there and I too would be very pissed if they reentered the market now after changing the lives of many many folks. This past year / plus+ has not been an easy one for most if not all.