PSA Peugeot Citroen, Europe’s second-biggest carmaker, will offer savings accounts through its financing arm to raise funding for dealerships and other automotive operations.
Banque PSA Finance is targeting deposits of 400 million euros ($521 million) by the end of the year, Chief Financial Officer Jean-Baptiste de Chatillon said at a press conference in Paris today.
The automaker is striving to raise funds to maintain the unit’s investment grade at Moody’s Investors Service, with measures that include refinancing the division’s debt. Standard & Poor’s Ratings Services cut Peugeot’s debt in February by one level and downgraded debt at the banking unit to junk.
France’s government offered guarantees last year for as much as 7 billion euros in new bond sales by the banking unit. Peugeot has won temporary European Union backing to sell 1.2 billion euros in government-backed bonds and must present more details on the plan to win full approval.
Peugeot is following competitor Renault SA in setting up a retail banking arm. RCI Banque began offering savings accounts in February of last year, with a deposit target of 500 million euros. It exceeded that goal and had total deposits of 893 million euros at end of December, RCI Banque said last month.
RCI Banque is now aiming for total deposits of 2 billion euros at its French and German retail savings businesses by the end of this year, and to increase that figure to 2.5 billion euros by the end of 2014.