PARIS French bank BNP Paribas' (BNPP.PA) car financing business will grow by a third after the acquisition of Opel/Vauxhall's financing arm for 900 million euros ($953.5 million) with PSA Group (PEUP.PA).
The acquisition was announced alongside PSA Group's agreement to buy Opel from General Motors (GM.N) in a deal valuing the business at 2.2 billion euros.
Banque PSA Finance and BNP Paribas Personal Finance will each acquire 50 percent of the share capital of the company which had 9.6 billion euros of outstanding car loans at the end of 2016 and had operations in 11 European countries.
"This perfectly fits in our development plan for Europe, we have said already that we want to grow in Germany and Northern Europe," said Thierry Varene, a member of the BNP Paribas executive committee responsible for large clients.
BNP Paribas, which is also advising PSA Group on the acquisition of Opel, has seen its outstanding car loans rise to 15 billion euros from 10 billion in 2013.
The chief executive of BNP Paribas Personal Finance, Laurent David, told Reuters the deal with Opel/Vauxhall was negotiated in just a few weeks and that it had been in competition with other banks.
BNP Paribas does not plan any other acquisitions in the sector for the time being and wants to finalize the deal in the fourth quarter, David added.
It plans to find synergies with its leasing arm Arval and its Cardif insurance unit.
($1 = 0.9439 euros)
(Reporting by Julien Ponthus and Gille Guillaume; Writing by Maya Nikolaeva; Editing by Adrian Croft and Susan Thomas)