Santander announces the sale of 49% of Santander Polska to Erste Group Bank, and agrees strategic cooperation across CIB and payments
Banco Santander has agreed to sell to Erste approximately 49% of Santander Polska’s share capital for €6.8 billion and 50% of the Polish asset management business (TFI) that Santander Polska does not own for €0.2 billion, for a total consideration of €7 billion, subject to customary conditions including regulatory approvals[1].
The all-cash transaction at 584 zlotys per share values the bank at 2.2 times first quarter 2025 tangible book value per share, excluding the declared dividend of 46.37 zlotys per share, and 11 times its 2024 earnings. It also represents a premium of 7.5% versus Santander Polska’s closing price on 2 May 2025, excluding the dividend, and 14% versus the six-month volume-weighted average price. Santander Polska’s shares will trade ex-dividend on 12 May 2025.
Following the transaction, Santander will own c.13% of Santander Polska and plans to take full ownership of Santander Consumer Bank Polska before closing by acquiring the 60% stake owned by Santander Polska.
Upon completion, which is expected around the end of 2025, the transactions are expected to result in a net capital gain of approximately €2 billion for Santander, increasing CET1 ratio by c.100 basis points, equivalent to around €6.4 billion, and result in a pro forma CET1 ratio of around 14%.
Strategic cooperation
In addition to the acquisition, Santander and Erste are also announcing a strategic cooperation to leverage each firm’s strengths and footprint in Corporate & Investment Banking (CIB) and to allow Erste to gain access to Santander’s payments platforms, aligning with Santander’s strategy to be the best open financial services platform globally.
In CIB, both Santander and Erste will leverage each other’s regional strengths to offer local solutions and market insights for their respective corporate and institutional clients via a referral model that will facilitate seamless client interactions and service offerings. Santander will also connect Erste’s clients with its global product platforms in the UK, Europe and the Americas and the banks will work together as preferred partners with the aim of building strong, mutually beneficial relationships to maximize joint business opportunities.
With Payments, the banks will explore opportunities for Erste, including with Santander Polska post-completion, to leverage Santander’s payments capabilities and infrastructure, including Santander’s PagoNxt business.
Santander’s strategy is focused on generating sustainable value creation for its customers and shareholders, deploying shared platforms across each of its five global businesses that offer the best customer experience at the lowest cost-to-serve, leveraging the group’s network and economies of scale.
Since it announced a new phase in value creation at its investor day in 2023, Santander has added 15 million customers, improved efficiency from 46.6% to 41.8% and generated a 62% increase in earnings per share.
Ana Botín, executive chair of Banco Santander, said,
“This transaction is another key step in our strategic focus on shareholder value creation which is based on both accelerating our platform strategy through ONE Transformation and growing the group’s scale in geographies with highly connected markets.
For Santander, we crystallise value at highly attractive multiples. For Erste, they are acquiring an outstanding business with above all, a world class team, which I am confident will continue generating value for Santander Polska’s customers, employees and stakeholders.
We will deploy the capital generated from the transaction in line with our capital hierarchy, prioritizing profitable organic growth.
We plan to devote 50% of proceeds (c.€3.2 billion) to accelerate the delivery of our planned extraordinary shareholder buybacks to early 2026, as well as to potentially exceeding the previously announced total share buyback target of up to €10 billion given the attractiveness of buybacks at current valuations, subject to regulatory approvals2.
Most of all, a huge thanks to Michał and to each one of our team in Poland for their outstanding contribution to the group over all these years. It has been an honour and a pleasure to work alongside you.”
Financial impact
Upon completion of the transaction, the group will run temporarily with a CET1 ratio above its target operating range of 12-13%, with the aim of returning to the target range over time by deploying capital in line with its capital hierarchy, prioritizing profitable organic growth and investments across its businesses that create a compounding effect on earnings, returns, book value and distributions.
Santander intends to distribute 50% of the capital released from this disposal upon completion, equivalent to approximately €3.2 billion of share buybacks. This will accelerate the delivery of its up to €10 billion share buyback target from 2025 and 2026 earnings and anticipated excess capital. As a result, there is potential to exceed the previously announced share buyback target given the attractiveness of buybacks at current valuations, subject to regulatory approvals[2].
The transaction is expected to be earnings per share accretive by 2027/2028 from the redeployment of capital through a combination of organic growth, share buybacks and any bolt-on transactions that meet the group’s strict strategic and return objectives. The capital released will give Santander more strategic flexibility to invest in other markets where the bank already operates in Europe and the Americas to accelerate growth, increase network revenues and maximise customer and shareholder benefits.
[1] Including the Polish Financial Supervision Authority (KNF).
[2] As announced on 5 February 2025, the board intends to allocate up to €10bn to shareholder remuneration in the form of share buybacks, corresponding to the 2025 and 2026 results, as well as to the expected excess capital. This share buyback target includes: (i) buybacks that are part of the existing shareholder remuneration policy outlined below, and (ii) additional buybacks following the publication of annual results to distribute year-end excesses of CET1 capital. The ordinary remuneration policy for the 2025 results, which the board intends to apply, will remain the same as for the 2024 results, consisting of a total shareholder remuneration of approximately 50% of the Group’s reported profit (excluding noncash and non-capital ratios impact items), distributed in approximately equal parts between cash dividends and share buybacks. The execution of the shareholder remuneration policy and share buybacks to distribute the excess CET1 capital is subject to corporate and regulatory approvals.
Commerzbank sells Hungarian subsidiary to Erste Bank
Contract signed for sale of Commerzbank Zrt. to Erste Group’s Hungary Zrt.
Commerzbank and Erste Group reach cooperation agreement for accompanying corporate customers in selected Central and Southeastern European countries
CEO Manfred Knof: “We are consistently aligning our international network with the needs of our core customers.”
Commerzbank AG will sell its 100% subsidiary Commerzbank Zrt. to Erste Bank Hungary Zrt. Both banks signed a contract to this effect today. As part of its “Strategy 2024”, Commerzbank announced in February that it would adjust its foreign presence. “We are consistently aligning our international network with the needs of our core customers and are focussing on international businesses with reference to Germany. We will continue to be the strong international banking partner in the most important trade corridors of the German economy but will need fewer own locations than before,” Chairman of the Board of Managing Directors of Commerzbank Manfred Knof explained.
The transaction in Hungary is still subject to the approval of the antitrust and banking supervisory authorities. It has been agreed to not disclose the purchase price. The closing of the sale and thus the start of the operative implementation of the transaction is planned for the second half of 2022. At the same time, a comprehensive cooperation agreement signed between Commerzbank and Erste Group will also enter into force. With this partnership, Commerzbank will be able to offer its corporate customers easy access to selected markets in Central and Southeastern Europe via its cooperation partner Erste Group. Commerzbank will remain present in Eastern Europe with its own locations in Poland, the Czech Republic, and Russia.
Focus on costumer orientation
Commerzbank Zrt., based in Budapest, was founded in 1993 as one of the first subsidiaries of West German banks in Hungary. Over the course of its almost 30-year history, the Hungarian subsidiary of Commerzbank has successfully established itself in the market with a comprehensive range of products for corporate clients. In addition to international customers, the Commerzbank subsidiary serves Hungarian SMEs and large customers with a team of about 100 employees. The main income is generated by the credit and trade finance and currency business. The bank is profitable and total assets amounted to approximately HUF400 billion (approximately €1 billion) in 2020.
Michael Kotzbauer, Member of the Board of Managing Directors responsible for the Business Segment Corporate Clients, said: “With the sale, we are becoming more efficient and with the cooperation agreement, we will continue to guarantee our customers access to the Hungarian market via Erste Group.” Kotzbauer further emphasised: “We are sure that with Erste Bank Hungary Zrt., we have found a buyer who is close to us in terms of culture, offers convincing products and services for our customers, and with whom we can execute a smooth transition for everyone involved in a cooperative manner.”
Erste Bank Hungary covers the entire spectrum of financial services. Measured by the number of customers, branches, and ATMs, it ranks among the top three banks in Hungary. Erste Bank Hungary has been a member of Erste Group, one of the largest providers of financial services in the eastern part of the EU, since 1997.
Bernd Spalt, Chief Executive Officer of Erste Group: “This acquisition is an important step for our corporate business in Hungary and perfectly complements our existing customer base in this segment. In addition, it will allow our clients to benefit from the excellent product knowledge, especially in fields of cash management and trade finance, that Commerzbank’s strong track record in Hungary ensures. Coming on the back of our purchase of the Hungarian online broker Random Capital earlier this year, this newest acquisition marks a further step in our pursuit of a targeted growth strategy in Central and Eastern Europe.”
Streamlining of foreign network progressing
For Commerzbank, the sale of its Hungarian subsidiary is a further step to the strategic streamlining of its presence abroad. The Bank plans on exiting 15 foreign locations by 2024. In Europe, these are the offices in Barcelona, Bratislava, Brussels, and Luxembourg, and, in Asia, Hong Kong. The Dubai office will continue as a representative office in the future. In addition, the network of international correspondent banks will be reduced from around 1,600 to around 1,300. The Bank had initially expected to pull out of 3 locations in the current year.
In the first nine months, however, the locations in Baku, Belgrade, Kuala Lumpur, and Jakarta have already been closed. With its presence in almost 40 countries in the future, the Bank remains present wherever it is important for its customers.