EU approves Hyundai captive bank in Germany

The European Central Bank has approved the establishment of Hyundai Capital Bank Europe (HCBE) in Frankfurt, Germany (pictured). The bank, a subsidiary of Hyundai Motor Group's auto financing arm Hyundai Capital Services, will start operations in December.

It will be established by transforming Hyundai Capital Services Deutschland (HCSD) GmbH into a bank. HCSD, established in 2010, is a consulting firm providing financial solutions to Hyundai and Kia brands. 

HCBE will offer wholesale and retail financing products for Hyundai and Kia cars, including dealer and instalment financing and leasing. It will also offer full-service fleet management, acting as an intermediary for the insurance and warranty products of European insurance companies, as well as offering deposit-taking business for private customers and dealers, writes Asset Finance International. 

HCBE's initial capital of €67.1 million is 80% financed by Hyundai, 20% by Kia. Its establishment is expected to provide a major boost to the European sales of Hyundai and Kia cars. 

In Germany, Hyundai and Kia are expected to sell 94,000 and 58,000 units respectively, representing 4.4% of the overall market, and establishing the Group as the third-largest foreign brand in Germany. 

Image: public domain