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Banco Popular’s [BME:POP] buyer BancoSantander [BME:SAN] is working on a complex transaction to recover the cards issued by Popular, as well as its ATM network, El Confidencial reported, citing unspecified sources. Santander considers the units to be strategic businesses, according to the report.

Banco Popular’s credit card businesses is owned by joint ventures with Värde Partners; while the ATM networks is owned by a joint venture with Crédit Mutuel, the Spanish-language report noted.

The cards are inside the platform WiZink, alongside cards from Citi and Barclays, ElConfidencial added.

These alliances were signed as a way to raise income from the sale of 50% of these businesses. WiZink was the result of merging Popular's own card business (about three million units) with those it acquired from Citi, first, and Barclays, later. Popular then sold 51% of WiZink to Värde, his partner in the real assets business Aliseda.

Santander now wants to re-segregate the WiZink cards coming from Popular and keep them, ElConfidencial went on to say. It wishes to take 100% control over this activity, which it would then merge with Santander's own cards. Cards are one of the main channels for customer loyalty - and revenue in card fees, the item noted.
Cards from Citi and Barclays are of much less interest given that loans granted to cards with high interest rates are very minority in Spain, unlike in Anglo-Saxon countries, and have very high default rates.

As for ATMs, owned by a joint venture with Crédit Mutuel, Santander deems it essential to recover the ownership of this network of some 2,400 terminals in order to fully integrate Popular and Santander branches by 2019 as planned. Santander is holding talks to the French bank.

According to the report’s sources, the dissolution of the alliance does not necessarily entail a cash payment as both banks may find joint ventures of interest to them.

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