Santander may buy stake in El Corte Inglés finance operations
Deal would allow department store chain to reduce debt on its books
Banco Santander is considering acquiring a stake in the consumer finance business of Spain’s leading department store chain El Corte Inglés for about 250 million euros, sources close to the potential operation said Monday.
The deal has yet to be closed and the size of the stake that Santander could purchase is still being negotiated.
Spain’s biggest bank will have access to El Corte Inglés’ extensive sales-point network and its clients. The department store chain manages 10.5 million of its own brand credit cards.
The operation will allow El Corte Inglés to extend the payment periods for sales it makes and widen the range of financial products it can offer.
El Corte Inglés’ financial business volumes last year amounted to 6.6 billion euros, 9.9 percent below the level of a year earlier. That represents about 42 percent of credit granted in Spain for the acquisition of consumer goods last year. The value of the division is estimated at 500 million euros.
According to website El Confidencial, which first reported the possible deal, El Corte Inglés would use the proceedings from the deal to reduce its debt. El Corte Inglés last year refinanced 3.7 billion euros in debt, 76 percent of the total on its books.
It made a profit of 171.5 million euros in 2012 down 18.3 percent from a year earlier as sales shrank 7.7 percent as a result of the crisis.