Subaru Financial Systems (STS) announced a $3.8 billion cash injection, with a strong focus on its auto-related business.
The $3 billion will allow STS to grow its workforce by 25% to nearly 300 employees, as well as expand its financial services division and broaden its consumer financial services offerings.
The move comes as a result of the company’s financial strength in recent quarters.
“STS is confident it can successfully respond to the industry-wide challenges we are facing,” said David Gassner, STS president and chief executive officer.
The company’s investment in its auto and consumer financial service businesses is part of a broader effort to increase its exposure to automotive and consumer businesses, which have experienced substantial headwinds in recent years.
STS reported earnings per share of $0.27 on $1.6 billion in revenue.
The stock, which was trading at $25.40 on Friday, was up 0.2% on the day.
The financial services company also announced a strategic investment of $1 billion to create a new company focused on financial technology services, and to invest $2 billion in a new financial services operations center.
STC will also invest in a $1-billion capital campaign to accelerate its expansion.
“We are building a stronger, more resilient financial services industry,” Gassners said.
“In the near term, we are focused on continuing to drive growth in the business and the financial services sector.”
STS said it would also continue to focus on “innovative new products and services,” such as its Financial Services Analytics platform, as part of the plan to invest in new technologies, and expand its offerings in the consumer, automotive, and other financial services sectors.
The new investment in the financial technology and technology services businesses will create more than 2,000 jobs in the U.S. and more than 400 in the UK.
ST S also said it will spend $1 million of its $3-billion cash injection to expand its operations in Europe, and will invest $500 million in Europe and the U-K to create jobs in those countries.
STCs largest business is its automotive financial services business, which covers a broad range of products and provides products for financial advisors and other firms.
STs current product range is car finance, car loan servicing, auto-maintenance services, vehicle insurance and vehicle servicing.
“Today’s announcement will help STS grow our operations in the automotive and financial services markets and further advance our long-term plans to grow our financial services portfolio,” Gaffney said.
The investment in STS’ automotive and auto-financial services business is the latest in a string of investments STS has made to grow operations and expand operations.
In September, STC announced that it had signed a multi-year lease agreement with the London-based property and building services company KPMG, which provides services for real estate, building and finance, as a “partner” of STS.
STCS also announced the purchase of a 30% stake in the retail financial services group of UK-based insurance company UBS AG for $1,000 million.
ST C S said in a statement that the company is “committed to our strategy to build a stronger financial services ecosystem that will provide us with the expertise and support we need to compete in this rapidly changing industry.”
“We have a unique opportunity to accelerate our growth, expand our capabilities, and build on our momentum and expertise to continue to grow the business of STC and to continue supporting the communities we serve,” Gaspenson said.
S also announced that a $4 billion capital investment in 2017 was part of its strategy to grow investments in its business and increase its financial strength.
In February, ST S announced a series of new investments to help it diversify its business into a broader range of businesses, including its automotive finance and auto insurance business, and consumer finance and consumer loans.
In January, ST CS announced a new $1B capital commitment to expand STS’s consumer business, a move that will allow the company to expand into a new consumer and business-focused business.