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U.S. banks may get to spend some excess cash on loans or lines of business that European banks will seek to dump. Still, a cloud hangs over the outlook for bank M&A next year.
November 16
Wells Fargo & Co. will expand its asset-based lending business into the United Kingdom by acquiring a lending arm of the Bank of Ireland.
The San Francisco banking giant said Monday that it had reached an agreement with Bank of Ireland to acquire Burdale Financial Holdings Limited and the portfolio of Burdale Capital Finance Inc., which has about $1 billion of loans outstanding to customers in the U.S. and the U.K.
The financial terms of the deal, expected to close in early 2012, were not released. The London-based Burdale will become part of Wells Fargo Capital Finance, which currently provides asset-based lending in the U.S. and Canada. Burdale provides asset-based lending in the U.S. and the U.K.
"Expanding our asset-based lending business into the U.K. allows us to better meet the international needs of our U.S.-based customers, while continuing to enhance our international asset-based lending platform," Henry Jordan, chairman and chief executive of Wells Fargo Capital Finance, said in a press release.
The deal is the second Wells Fargo has struck with Bank of Ireland this year. In May, it bought Bank of Ireland's currency exchange operations in Florida.
Merger and acquisition activity between U.S. and foreign banks is predicted to pick up. U.S. banks eager to invest excess cash could look to purchase assets from banks in Spain, England, Ireland and France needing to strengthen their balance sheets.
In August, Wells Fargo also purchased some U.S. commercial loans from the Irish Bank Resolution Corp., a holding company the Irish government created when it merged and nationalized two ailing banks.
