Spanish banking giant Santander (NYSE: STD) paid compatriot telco Telefónica (NYSE: TEF) 38mn euros (US$54mn) in 2009 for data of some 190mn customers in Argentina, Brazil and Chile to sell insurance to these customers, Spanish financial daily Expansión reported without citing sources.
Brazil, which accounts for some 42% of the customers included in the agreement, represented about one-third of the Santander's 2.49bn-euro insurance revenues last year. The Spanish bank still has to pay Telefónica 7.5mn euros for the deal, which was signed in 2009, according to Expansión.
Accessing Telefónica's broad customer base in the region was a key element in the 25-year distribution agreement that the Spanish bank signed with Swiss insurer Zurich Financial Services earlier this year, according to Expansión.
Under terms of that agreement, Santander will take 100% of fee income coming from the distribution of insurance products at its 5,880 branches in the region, with Zurich, gaining access to an additional 36mn customers in Latin America.
Zurich also paid US$1.67bn in cash upfront for a 51% stake in Santander's combined P&C, life insurance and pension operations in Brazil, Chile, Mexico, Uruguay and Argentina.
The Expansión report said Santander is trying to get rid of the origination side of its insurance business and keep the distribution part to comply with the stricter capital requirements that the Basel III accord will impose on banks owning more than 10% in an insurance company.
Neither Santander nor Telefónica replied to BNamericas' requests for comment.