Retail banking markets in three of the world’s largest
economies – Japan, Germany and the UK – have been transformed with
billion-dollar acquisitions.
Japan’s market has been shaken up with Shinsei’s $5.4 billion
purchase of GE’s local consumer finance business, a deal which
propels Shinsei into the sixth-largest consumer finance player. It
was, Shinsei said, “a unique opportunity to redefine the Japanese
consumer finance industry”, and gives the bank 2.2 million new
accounts, 1,138 branches and distribution points, and total loans
outstanding of ¥884 billion ($8.3 billion).
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It also adds the high-profile ‘Lake’ brand to Shinsei’s
portfolio, a unit with a relatively healthy credit performance and
low default rates; a spokesperson for Shinsei told RBI
that the bank would not look to merge the Lake brand with Shinsei’s
existing Aplus unit.
For GE, the sale is another step away from mature consumer
finance markets as it shifts focus to emerging and commercial
markets.
In Germany, Citi has offloaded its profitable but sub-scale
retail banking arm to France’s Credit Mutuel for €4.9 billion ($7.7
billion). Citibank Privatkunden had post-tax earnings in 2007 of
€365 million – the sale is expected to result in an after-tax gain
of $4 billion for the US group.
The deal is also a sign of a new, international focus for Credit
Mutuel, one of the more conservative French banking groups.
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By GlobalDataAnd in the UK, Spain’s Santander is to buy the country’s
seventh-largest bank, Alliance & Leicester (A&L), for a
knock-down £1.3 billion ($2.6 billion). Santander, which already
owns the UK’s sixth-largest player, Abbey, will add a further 254
branches to Abbey’s 703, giving Santander a comparable UK branch
network to HBOS (957 versus 1,092). A&L has a £42 billion
mortgage book and deposits of £31 billion. Santander says it will
save £180 million a year from cutting jobs and centralising IT
systems.
Further consolidation is expected in both Japan and Germany (in
the latter, the impending sale of Deutsche Postbank); banks in the
UK, meanwhile, such as Barclays and HBOS, have struggled with a
variety of capital-raising initiatives (see Premium income for Spain’s banks).
