Santander Brasil, the Brazilian unit of Spanish banking giant Banco Santander, said Thursday it has formed a payroll-lending joint venture with Banco Bonsucesso.

Santander Brasil will have a 60 percent stake in the joint venture, while Bonsucesso, a Belo Horizonte, Brazil-based lender, with have the remaining 40 percent interest.

The creation of the new bank will require an investment outlay of 600 million reais ($272.7 million), with Santander, Brazil's third-largest private bank, contributing 460 million reais ($209 million) of the total.

Banco Bonsucesso, which specializes in payroll-deductible loans, will contribute its 1 million payroll-lending customers and 40-branch network to the joint venture.

Under this type of lending arrangement, installments on loans that customers take out are deducted directly from their paychecks.

"This is an agreement that will allow Santander to bolster its ability to offer payroll loans and access the knowledge and experience that Banco Bonsucesso already has in this segment," Santander Brasil CEO Jesus Zabalza said in a teleconference.

Although payroll lending is not its specialty, Santander has a 12.3-billion-reais ($5.73-billion) portfolio in that segment.

"This is a key product for our growth strategy because it is low risk. Payroll lending allows a large segment of the population to access credit and banks to have payment guarantees," Zabalza said.

Banco Bonsucesso's loan portfolio in this segment amounts to 1.3 billion reais ($590.9 million).

Zabalza said Banco Bonsucesso, which also specializes in loans to small- and medium-sized enterprises, will operate its other business lines independently from the joint venture.

Santander Brasil had initially sought to acquire Banco Bansucesso but ended up joining up with that smaller institution only in the payroll-lending segment. EFE