WOOD Flash - Erste Group: enters Poland by buying a controlling stake in Santander Bank Polska
Erste Group has signed an agreement with Banco Santander, to buy an effective controlling stake of 49% in Santander Bank Polska, via a full cash transaction at PLN 584/share (c.EUR 6.8bn). It will also buy a 50% stake in Santander TFI for EUR 0.2bn. Banco Santander will buy back 60% of Santander Consumer Bank from Santander BP, before the finalisation of the transaction, which is expected in 4Q25E. The transaction is subject to the usual regulatory and antimonopoly office approvals, but we do not see these as a material risk.We read the transaction as potentially positive for Erste Group’s EPS (the bank is guiding for more than 20% of 2026E accretion), but it comes with a major capital effort on Erste’s side. The bank will utilise its entire capital surplus fully; cancel the EUR 700m share buyback planned for 2025E; and limit its 2025E dividend payout significantly, to a maximum of 10%. On top of the above, Erste Group will undertake additional RWA optimisation efforts. The transaction is negative for Santander BP shareholders, at least in the initial stages, as it eliminates any potential takeover premium for the minority shareholders of the bank. We also see a share overhang lingering in medium term, as Banco Santander currently holds 62% of Santander BP.
Erste Group is a financial services provider based in Austria. As of Dec 31 2015, Co.'s total assets amounted to Euro199,743 million and the number of customers was approximately 16.5 million. Co.'s key business is the retail business, covering the entire spectrum from lending, deposit and investment products to current accounts and credit cards. In addition to providing financial services to private individuals, Co.'s core activities also include advisory services and support for corporate clients in financing, investment and access to international capital markets, public sector funding and interbank market operations.
Bank Zachodni is a bank seated in Poland. Co. and its subsidiaries provide a range of banking services for individual and business customers and operate in domestic and interbank foreign markets. Additionally, Co. provides also the following services, including intermediation in trading securities, leasing, factoring, asset/ fund management, insurance services, trading in stock and shares of commercial companies, and brokerage activity. Operational activity of Co. and its subsidiaries has been divided into five segments: Retail Banking, Business and Corporate Banking, Global Banking and Markets, ALM (Assets and Liabilities Management) and Centre, as well as Santander Consumer.
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