French carmaker PSA Peugeot Citroen SA (EPA:UG) is holding preliminary talks to shed part of its auto consumer-credit unit Banque PSA Finance to Spanish lender Banco Santander SA (MCE:SAN), the Wall Street Journal cited sources as saying.
The automobiles manufacturer wants to unload part of the banking business in an effort to eliminate reliance on a EUR7bn (USD9.2bn) package of credit guarantees that could be regarded as unjustified state aid. The European Commission is yet to rule on the state guarantees, but officials at Peugeot and the French government are confident that the package would be approved, the paper said.
As for the negotiations with Banco Santander, Peugeot may transfer half of Banque PSA Finance to the Spanish lender, but there are other options as well, the report said. Such a transaction would help Santander strengthen its own consumer credit unit.
The paper said it failed to get comment from Santander and Peugeot.