Santander Consumer Bank, the Italian affiliate of Santander Consumer Finance, has agreed to create a consumer finance joint venture with Italian telecommunications provider TIM.
The joint venture will provide consumer finance services to the clients of TIM in Italy. Its objective will be to initially provide financing for the acquisition of devices through instalment loans. At a later stage, the new entity will offer financing for other consumer finance and insurance products.
TIM CEO comments on the consumer finance joint venture
TIM CEO Luigi Gubitosi said: “This strategic joint venture will allow us to free up capital and reduce credit risk, at the same time supporting our sales and broadening TIM’s revenue base towards new profitability opportunities.
“Santander is the right partner because of their strong track record of successful partnerships throughout Europe and their expertise in consumer finance ensures a quick time to market at low cost.”
As per the agreement terms, Santander Consumer Bank will hold a stake of 51% in the Italian consumer finance joint venture, while TIM will own the remaining 49% stake. The new entity is likely to start operations in 2020 and will handle credit associated with mobile/landline products and services through instalment plans.
Banco Santander CEO José Antonio Álvarez said: “I´m delighted with this agreement, which will allow Santander Consumer Finance to become a leader in consumer finance in an attractive market, accompanied by one of the country’s most trusted brands.”
Santander Consumer Finance, which has operations across 15 countries in Europe, is part of Spanish banking group Banco Santander.
The company provides a variety of financial solutions using points-of-sale and direct-to-consumer channels like branches, websites, and phone centres. Some of its products are consumer auto loan, financial lease, operational lease, credit lines auto, and personal loans.
Earlier this month, Banco Santander signed a deal to acquire a 50.1% stake in Ebury, a facilitator of trade and foreign exchange for small and medium enterprises, for £350m ($451m).
