Santander Consumer USA, an affiliate of Banco Santander, has entered into an agreement with Citigroup to purchase $3.2bn of auto loan portfolio of CitiFinancial Auto.

Santander and Citi have entered into an agreement under which Santander will service a portfolio of approximately $7.2bn of auto loans that will be retained by Citi.

Santander said that the acquisition is in line with its strategy to explore new partnerships and transactions that complement its existing business model and provide incremental benefits from a service and growth perspective.

According to the Santander, it will purchase the $3.2bn portion of the portfolio at a price equal to 99% of the value of the gross receivables.

Upon completion, the transaction will reduce GAAP assets in Citi Holdings by approximately $3.2bn, according to the Citi.

The terms of the transaction were not disclosed. However, the transaction is expected to close by the end of the third quarter of 2010, and is subject to regulatory approvals and closing conditions.