Private equity firm Apollo Global Management LLC (NYSE: APO) is set to buy the auto and consumer loan unit of Bankia for an undisclosed price.
The target, which does business as FinanMadrid, is being purchased through Apollo European Principal Finance Fund II, which secured €1.6 billion ($2 billion) in June 2012.
The move underscores a trend in which private equity firms have raised funds as a means of acquiring banks’ nonperforming loans, which are being sold in recent years in order to meet new regulatory requirements and repay government bailouts.
The deal also allows Apollo to increase its services to European financial institutions as they restructure their balance sheets, according to statement by Andrés Rubio, head of Apollo’s Spanish fund.
FinanMadrid includes more than 188,000 customer accounts that will continue to be managed by a 125-person operating team based in Madrid.
The transaction, which is subject to regulatory approval, is expected to close within four months.
Apollo was founded by chief executive and chairman Leon Black (pictured) in 1990.