Economy, Auto

Geely’s Foray into Financial Services in Europe

Geely is set to establish in Europe with bank share purchase.Geely is set to establish in Europe with bank share purchase.

Denmark’s Saxo Bank co-founder Lars Seier Christensen agreed to sell his 26% stake in the bank to a subsidiary of Chinese automaker Zhejiang Geely Holding Group.

The investment marks Geely’s first foray into financial services, Reuters reported on May 10.

Geely is better known as the owner of Volvo Cars, London Taxi Co. (Black Cabs) and its own auto brand in China.

It also sells vehicles in Iran, and will soon kick start production with Bam Khodro in the south of the country.

The GC6 sedan will be the first locally-assembled product of Geely to be offered in the Iranian auto market and is expected to be priced at 500 million rials ($13,000).

Meanwhile, some bank minority shareholders could exercise so-called tag-along rights that would increase Geely’s stake to 30%, making it the largest shareholder, Saxo Bank said.

The bank derives most of its income from its online trading services for foreign exchange traders rather than traditional banking.

Kim Fournais, who founded Saxo Bank with Christensen and Marc Hauschildt in 1992 and still owns a 26% stake, said the new Chinese shareholder could help increase revenue opportunities.

“I am confident that partnering with Geely creates an even stronger foundation to capitalize on the many global opportunities and not least in the growing Chinese and Asian markets,” Fournais said.

Saxo Bank has 1,600 employees in 18 countries and generated operating revenue of $428 million (3.0 billion yuan) last year.

It declined to disclose financial terms of the deal, which it hoped to finalize in the fourth quarter.

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