| New York Times | - |
The purchase, for which financial
details were not disclosed, signals the first step in a project that
the Airbus Group, formerly known as European Aeronautic Defense and
Space, began studying in 2010.
Airbus Buys German Bank for In-House Finance Unit
By NICOLA CLARK
Edgar Su/Reuters As Airbus ramps up production, lending remains constrained in Europe.
PARIS — The Airbus Group, the parent company
of the European plane maker, said Friday that it would acquire Salzburg
München Bank, a small German private lender, to develop into an in-house
bank providing loans to suppliers and other small-business partners.
The purchase, for which financial details
were not disclosed, signals the first step in a project that the Airbus
Group, formerly known as European Aeronautic Defense and Space, began
studying in 2010. That was during the depths of the European financial
crisis, when lending was sharply curtailed to small and midsize
businesses across the region. Business lending continues to remain weak
across Europe, despite glimmers of an economic recovery.
Airbus
relies on thousands of suppliers, many of them small and privately
owned. The global boom in demand for new aircraft has put pressure on
those suppliers to invest in new production capacity to keep pace. But
those companies have struggled in recent years to raise the money
necessary to make those investments. That has raised concerns that the
group could face parts shortages as Airbus ramps up production in
advance of a huge wave of commercial jet deliveries set to begin in
2015.
“Acquiring Salzburg München Bank provides us
with a good platform to launch our company bank project,” Harald
Wilhelm, Airbus’s chief financial officer said in a statement, adding
that the purchase would also provide the group itself with increased
financing flexibility.
A number of large European companies — including the industrial group Siemens and car makers like BMW, PSA Peugeot-Citroën and Volkswagen
— have established their own banks in recent years. In addition to
facilitating direct lending to suppliers, such banks also give companies
the ability to borrow cash from the European Central Bank, at better rates than can be had in the corporate bond markets.
Airbus’s chief competitor, the American aviation giant Boeing,
owns a large financial subsidiary, Boeing Capital. It arranges aircraft
leases, third-party loans as well as in-house financing to airline
customers. The unit manages a loan portfolio of around $4 billion.
By contrast, Airbus’s banking venture would be much more modest.
Salzburg München Bank, based in Munich, is a
unit of the Austrian financial group Raiffeisenverband Salzburg, which
had 6.5 billion euros, or $8.9 billion, in assets as of June 30, 2013.
While the German bank unit focuses primarily on serving private banking
clients in Bavaria and Austria, it also lends to small and midsize
businesses. Salzburg München Bank gave loans of just under 300 million
euros in 2012, according to its most recent annual report.
Martin Aguëra, a spokesman for the Airbus
Group, stressed that the purchase of Salzburg München, which will be
renamed Airbus Group Bank, did not signal an intention to move into the
business of commercial aircraft financing.
“Our aircraft clients typically organize their own financing, and we do not intend to replace this,” Mr. Aguëra said.
The company said it expected the deal, which
must still be approved by German banking and competition regulators,
would close later this year.
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