SCH Pumps US$242mn into Patagon

Spanish financial group Santander Central Hispano (SCH) (NYSE: STD) has injected 273mn euros (US$242mn) into its online banking and brokerage subsidiary Patagon (www.patagon.com), a company spokesperson confirmed to BNamericas. SCH now has a 95% stake in Patagon, as a result of the capital increase and the acquisitions of DirectBank in Germany (2001) and OpenBank in Spain (2000), the spokesperson said. The capital increase will be used to fund expansion in Latin America, Spain and Germany, according to wire services. SCH secured control of Patagon in March 2000 for US$550mn after Argentine Wenceslao Casares set up the company in 1997 for some US$30,000. On Wednesday Patagon confirmed plans to cut a total of 72 jobs from its 775 global workforce, in order to speed up its path to profitability sometime next year. Media VP Ian Katz told wire services that Patagon would reduce staffers at its Miami headquarters by 37 to 12 by year-end and cut 30 positions from Brazil and others in Argentina, Chile, Mexico and Venezuela. Katz said restructuring would see other offices take on tasks performed from Miami and that the company now expects to post a US$20mn loss for 2002. Miami will remain Patagon's Americas HQ, but the search is on for a buyer of its US brokerage business, he added. Patagon has reached profitability in Germany and is nearing breakeven in Spain, where it operates as a bank, but its personal finances operations in Argentina, Brazil and Mexico are still in the red, Katz said.