Banco Santander has reached an agreement to sell nearly half (49%) of its Polish unit, Santander Polska, to Austria’s
Erste Group Bank AG for €6.8 billion, along with a 50% stake in Santander Polska’s asset management arm for €0.2 billion, totaling €7 billion in cash. The deal values Santander Polska at 584 PLN per share, reflecting a 7.5% premium over the recent closing price and 2.2 times its tangible book value as of Q1 2025, excluding dividends.
Post-transaction, Santander will retain about 13% ownership of Santander Polska and plans to fully acquire Santander Consumer Bank Polska by purchasing the remaining 60% stake before the deal closes. Completion is expected by the end of 2025, pending regulatory approvals.
The sale is projected to generate a net capital gain of around €2 billion for Santander, boosting its CET1 capital ratio by roughly 100 basis points to about 14%, temporarily exceeding its target range. Santander intends to return half of the capital raised-approximately €3.2 billion-to shareholders via accelerated share buybacks, potentially surpassing its earlier €10 billion buyback target, subject to regulatory consent.
Alongside the sale, Santander and Erste have agreed on a strategic partnership to enhance their corporate and investment banking services and to allow Erste access to Santander’s payments platforms, including PagoNxt. This collaboration aims to leverage each bank’s regional strengths and global networks to better serve clients and expand business opportunities.
Santander’s executive chair, Ana Botín, emphasised the deal as a key move in delivering shareholder value and accelerating Santander’s platform strategy, while expressing confidence in Erste’s stewardship of Santander Polska’s operations. She also highlighted plans to prioritise profitable organic growth with the capital released from the transaction.
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 approvals.
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.”
Overall, the transaction is expected to be accretive to Santander’s earnings per share by 2027/2028, providing the bank with greater strategic flexibility to invest in other markets and continue generating value for customers and shareholders alike.
