Wells, PNC Could Pick Up Chrysler Financial

Several U.S. banks could be interested in buying Chrysler Financial.
By Maria Woehr ,

NEW YORK (

TheStreet

) -- Several U.S. banks could be interested in

Chrysler Financial

now that

Cerberus Capital Management LP

is reportedly shopping the asset, according to financial analysts.

Gerard Cassidy, a RBC Capital Markets analyst said that

PNC Financial Services Group

(PNC) - Get Report

,

Wells Fargo

(WFC) - Get Report

,

JP Morgan

(JPM) - Get Report

,

Bank of America

(BAC) - Get Report

and

US Bancorp

(USB) - Get Report

could be interested in purchasing the auto lender.

"Right now banks are looking to diversify assets in their portfolios," Cassidy said. "Auto lending is a profitable business and banks like Wells Fargo have been very successful in this area."

Paul Miller, an analyst at FBR Capital Markets says that Wells Fargo, US Bancorp and PNC all have enough capital on their balance sheets to fund an acquisition. He added that US Bancorp's auto exposure is eight percent or 15 billion, while auto makes up two percent of PNC's portfolio.

"I don't know if Wells would be allowed to buy Chrysler Financial because they are so large. Regulators might be concerned about that," Miller said. "PNC and US Bancorp would most likely buy them. US Bancorp has been more aggressive. Overall, auto lending is one of those areas that banks are interested in and has growth potential."

Rochdale Securities analyst Richard Bove agreed that the larger banks would likely consider Chrysler Financial if it is up for sale.

"The auto loan business has gotten stronger in the past year and the big banks would like to buy Chrysler Financial if for no reason than to get hold of its loan portfolio," Bove said. "Banks have traditionally been major auto lenders. They lost that business to the monolines decades ago and got it back when the auto companies imploded."

Cerberus began soliciting interest in Chrysler Financial last month, according to an article in

Bloomberg

.

Cassidy also said that auto maker Chrysler, currently owned by Italian auto maker

Fiat

, was likely to be also looking at

purchasing the auto lender for itself.

--Written by Maria Woehr in New York.

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Maria Woehr

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