South Korean carmaker Hyundai Motor Group announced Monday that it received approval from the European Central Bank (ECB) to open a new bank in Europe to offer car financing.
The bank is expected to start operation in December and will be based in the German financial capital of Frankfurt, the carmaker's financing arm, Hyundai Capital Services, said.
The bank, to be known as Hyundai Capital Bank Europe (HCBE), is expected to be "a major booster for Hyundai and Kia car sales in Europe," the company said.
Hyundai Motors and Kia Motors together make up the fifth largest carmaker in the world.
The bank plans to offer "direct auto financing services - dealer financing, installment financing, lease, insurance brokerage and others - to consumers."
The ECB issued the new bank's licence on September 23 after "a deep review" by German financial authority BaFin.
The new bank will be created from Hyundai Capital Germany GmbH, which the South Koreans set up in 2010 with Santander Consumer Bank AG to provide car financing.
Hyundai is planning other banks in Spain, France and Italy, with the Frankfurt-based bank acting as European headquarters, a spokeswoman said.