Pepper Group wants to make the most of Portugal's economic recovery and car loans' improvement. The CEO of the Australian group who purchased Banco Primus told ECO he wants to start taking deposits.
An “irresistible combination” between a good economic environment in Portugal and the strength of Banco Primus made the Australian Pepper Group move forward with the purchase of the Portuguese bank for 65 million euros. With this transaction, which is still dependent on regulators’ approval, the Australian group wants to expand its business in Europe by means of the accelerating Portuguese credit market — but they also want to start receiving deposits.
“We have been looking at the Portuguese market for some time and found the economic environment coupled with Banco Primus an irresistible combination“, states the CEO of the Pepper Group Mike Culhane, to ECO. The transaction should be concluded in the first quarter of next year, awaiting the green light from the Bank of Portugal and the European Central Bank (ECB).
Pepper Group’s action falls mainly on consumer credit. The Australian financial group is listed in the country’s stock market and is assessed at 450 million euros. In Portugal, Banco Primus’ operation also falls on the granting of consumer credit (mainly car loans), and on the mortgage market in Portugal and in Spain — in 2016, the bank achieved a 26.5 million euros’ income. Currently, it holds an assets portfolio worth around 500 million euros.
“Banco Primus is a well-managed business that has achieved strong market share in the used car loans market in Portugal. It’s a sector that we understand well, and Banco Primus operates in a relative close proximity to our Spanish operations“, Mike Culhane further explains.
"We have been looking at the Portuguese market for some time and found the economic environment coupled with Banco Primus an irresistible combination.”
In Europe, Pepper Group is already settled in the United Kingdom, Ireland and Spain. With the purchase of the Portuguese bank to the French Crédit Foncier, Pepper Group sees Portugal as an obvious option on their expansion plans for Europe. “This acquisition sees us entering the Portuguese market at a time where macro and micro factors would appear to be strongly in our favor“, highlights Culhane. “By purchasing Banco Primus, we are left with a world-class management team, who have carved out an attractive niche in the Portuguese auto lending market“, the CEO explains.
Culhane states they will not make any more acquisitions in Portugal, but rather increase the small banks’ operation by broadening its offer to include banking deposits. “While it is still subject to further regulatory approvals, the ability to take deposits in Portugal and Spain provides the Group with a significant strategic benefit, because it allows for further asset growth in both countries”, states the Pepper Group CEO.