Popular completes acquisition of Wells Fargo’s auto finance business in Puerto Rico
SAN JUAN – A subsidiary of Puerto Rico-based Banco Popular completed Wednesday, Aug. 1, the acquisition of certain assets and the assumption of certain liabilities related to Wells Fargo & Co.’s auto finance business on the island, Reliable.
Popular Auto acquired about $1.6 billion in retail auto loans and $360 million in primarily auto-related commercial loans. Reliable will continue operating as a division of Popular Auto until it becomes a fully integrated operation. Reliable’s employees are now employed by Popular Auto.
Wells Fargo retained approximately $385 million in retail auto loans as part of the transaction and entered into a loan servicing agreement with Popular Auto.
“We are pleased to welcome Reliable’s customers, and we have put in place a plan to ensure that they will continue to receive the quality of service and customer experience to which they are accustomed,” Ignacio Álvarez, CEO of Popular, said in a news release. “We are also pleased to welcome over 400 Reliable employees, who are now part of the Popular family. This transaction reaffirms our commitment to Puerto Rico and our confidence in the future.”
Popular expects the transaction, “which was funded with available cash, to contribute approximately $36 million of net income for the first 12 months after closing, excluding transaction costs and servicing income,” the release adds.
Besides auto and equipment leasing and financing, Banco Popular provides retail, mortgage and commercial banking services in Puerto Rico and the U.S. Virgin Islands. It also offers investment banking, broker-dealer and insurance services through specialized subsidiaries. Its New York-chartered banking subsidiary, Popular Bank, provides retail, mortgage and commercial banking services through branches in New York, New Jersey and Florida.