The Spanish group has said its Santander Consumer Finance (SCF)
unit has agreed in principle to acquire the European consumer
finance business of RBS, a unit with 861 employees serving 2.3
million customers in Germany, the Netherlands, Belgium and Austria.
The division offers instalment loans both directly and via partners
as well as credit card and consumer finance operations through a
number of retail chains.

The deal makes Santander a top five European consumer finance
player, and the biggest in Germany. The biggest European players
remain the French banks BNP Paribas and Crédit Agricole, which have
pioneered cross-border expansion in Europe through their specialist
consumer finance subsidiaries Cetelem (BNP Paribas) and Sofinco and
Finaref (Crédit Agricole).

Société Générale, which has invested substantially in its
pan-European consumer finance franchise over the past two years,
especially in Central and Eastern Europe, is rapidly catching
up.

Santander’s deal with GE Money saw it acquire businesses in
Germany, Finland and Austria and GE’s cards and auto financing
operations in the UK. The GE deal will expand the bank’s existing
consumer finance businesses by around 20 percent and is expected to
generate synergies of €140 million over three years. An analyst
talking about the GE Money deal said Santander was looking to
achieve a “critical mass” in the European consumer finance market.
Santander’s consumer finance business contributed 24 percent of the
group’s €7.8 billion net operating income in 2007, an increase of
55 percent.

The RBS acquisition is conditional upon a definitive agreement and
relevant approvals from various national authorities, including the
German bank supervision authority and the cartel
authority.