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 Micha? 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.
