UPDATE 2-Popular to buy R-G's mortgage servicing rights

jueves 18 de septiembre de 2008 00:40 CEST
 

(Adds deal value, analyst comments, background)

By Santosh Nadgir

BANGALORE, Sept 17 (Reuters) - Popular Inc (BPOP.O: Cotización) said its Puerto Rican banking unit Banco Popular agreed to buy the third-party mortgage servicing rights from R-G Mortgage Corp, a unit of R-G Financial, for about $34 million.

San Juan-based Popular said the deal, expected to close in the fourth quarter, will immediately add to its earnings.

"R-G Mortgage Corp is a bank that's struggling and they needed to raise some capital," Joseph Gladue, analyst with B. Riley & Co, said by phone.

The third-party servicing rights serve a mortgage loan portfolio of about $5.1 billion, Popular said.

Banco Popular has been striving to narrow the scope of its mainland U.S. operations that are most exposed to the credit and mortgage markets and leverage on its core strengths in Puerto Rico.

In January, it sold much of its U.S. consumer finance business Equity One to a unit of American International Group Inc (AIG.N: Cotización) for about $1.5 billion.

Popular had sold the loan and servicing assets of its U.S. mortgage unit worth $1.17 billion to Goldman Sachs (GS.N: Cotización) in August.

Analyst Gladue added that Banco Popular still has a lot of work to do before it makes its U.S. mainland operations profitable and that would probably involve selling some additional assets.

Popular shares rose to $8.10 in after-hours trading. The shares closed at $8.00 in regular session Wednesday on Nasdaq. (Editing by Gopakumar Warrier)