Crestar to Buy Great Western Portfolio

Richmond, Va.-based Crestar Financial Corp. said it agreed to buy Great Western Financial Corp.’s student loan business, including $370 million of loans in California and Florida. While terms of the transaction weren’t disclosed, Great Western, the second-largest U.S. thrift, said it expects to record an after-tax gain of $13.8 million in the fourth quarter from the sale, which is expected to close by the end of the year. The sale is part of Chatsworth-based Great Western’s plan to focus on its more profitable consumer-lending business. The company is also considering selling or creating a joint venture for its Sierra Capital Management mutual funds subsidiary. The acquisition would boost the student loan portfolio of Crestar, which is the holding company for Crestar Bank of Virginia, to about $900 million and expand its customer base. GW shares lost 12.5 cents to $30.875, while Crestar shares rose 25 cents to $69.125. Both trade on the NYSE.