Santander to buy GE’s Mexico mortgage portfolio

MEXICO CITY (BestGrowthStock) – General Electric’s GE Capital (GE.N: ) said on Friday it will sell its $2 billion portfolio of mortgage business in Mexico to Spanish bank Santander (SAN.MC: ).

GE Capital has provided consumer mortgages in Mexico since 2002, but the financial crisis slowed growth in the sector.

“This sale is consistent with our strategy to exit non-strategic businesses that lack scale to help reduce GE Capital’s balance sheet while investing in core industrial and commercial finance platforms,” GE said in a statement.

GE Capital did not provide terms of the deal, expected to close in the first half of 2011.

This is the second acquisition announcement in the Mexican financial sector in just over a month. In mid-November, Banorte (GFNORTEO.MX: ) said it was buying smaller financial group IXE (IXEGFO.MX: ) in a stock swap valued at around $1.3 billion.

Santander is Mexico’s No. 4 bank, and with the GE’s unit acquisition it expects to grow in the mortgage sector as Mexicans slowly recover from a severe recession that slowed home building.

“This acquisition will make us the second leading provider of mortgages in Mexico,” said Marcos Martinez, head of Grupo Financiero Santander, in a separate statement.

(Reporting by Cyntia Barrera Diaz; Editing by Padraic Cassidy)

Santander to buy GE’s Mexico mortgage portfolio