Magazine article American Banker

NationsBank in Talks for Chrysler Unit

Magazine article American Banker

NationsBank in Talks for Chrysler Unit

Article excerpt

NationsBank Corp. is negotiating to acquire the consumer finance arm of Chrysler Corp., a move that would expand the bank's consumer loan portfolio by about 16%.

NationsBank officials have already visited the Allentown, Pa., headquarters of Chrysler First Inc. to conduct an extensive review of the unit's books, sources confirmed on Friday. They declined to say whether they, thought a deal would be completed.

Chrysler First has $4.9 billion in receivables, but analysts said they couldn't speculate on how much it would fetch. The No. 3 automaker purchased the unit in 1985 for $405 million from BankAmerica Corp. It had $4.3 billion in receivables at the time.

In Line with Consumer Strategy

The acquisition would be consistent with NationsBank's previously announced strategy of building its share of consumer loans to 50% of its total portfolio, up from the current 39%. The Charlotte, N.C.-based bank currently has about $27 billion in consumer loans outstanding.

A NationsBank spokesman declined to comment Bob Heath, a spokesman for Chrysler First's parent company, Detroit-based Chrysler Financial Corp., said the automaker's consumer finance arm has been on the block since the second quarter, but would not comment on whether NationsBank was negotiating to buy it.

Chrysler First has three lines of business. It finances consumer loans such as home equity, personal lines of credit, retail installment, and private-label credit cards. It also does inventory financing for manufacturers and retailers. …

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