Popular Inc. said today that it agreed to sell its consumer lending unit Equity One to a division of AIG for roughly $1.5 billion.
The sale to AIG’s American General Finance includes about $1.47 billion of Equity One’s subprime mortgage and consumer loan portfolio.
The move will allow Popular, a unit of Banco Popular, to focus on its core banking business, without the stress of relying on its faltering mortgage business, which caused third-quarter profit to fall 56 percent thanks to the ongoing mortgage crisis.
As a result of the deal, AIG may retain 24 of Equity One’s 130 branches and 250 of its 512 employees.
The outstanding branches will be closed, and it is believed that remaining employees will either be laid off or relocated if possible.
Popular expects the transaction to close in the first quarter, pending regulatory approval, creating a $19.5 million charge related to severance and lease terminations.
Check out the big list of mortgage layoffs, closed lenders, and mergers, which seems to be growing ona daily basis.