On May 5, Erste Group Bank AG (“Erste Group”) and Banco Santander S.A. (“Santander Group”) announced that they have entered into an agreement for Erste Group to acquire a 49% stake in Santander Bank Polska Group S.A. (“Santander Bank Polska”) for a cash consideration of PLN 584 per share (approximately 6.8 billion euros) and a 50% stake in Santander Towarzystwo Funduszy Inwestycyjnych S.A. (“Santander TFI”) for approximately 0.2 billion euros cash consideration from Santander Group. Together, this amounts to a total cash consideration of 7.0 billion euros.
Santander Bank Polska is the third-largest bank in Poland by assets, with market share >8% (based on transaction perimeter as of December 2024), and is also one of the most profitable in the country. It offers a full suite of commercial banking products to retail, SME and corporate clients. Santander TFI is an asset management company with 6 billion euros in assets under management as of December 2024.
The proposed transaction is expected to increase Erste Group’s earnings per share (EPS) by >20% and its return on tangible equity (ROTE) to ~19% in 2026 versus current market consensus of ~15%.
The terms of the acquisition includes the following:
- Erste Group to acquire a 49% controlling stake in Santander Bank Polska Group S.A. and a 50% stake in Santander Towarzystwo Funduszy Inwestycyjnych S.A. from Banco Santander
S.A. for a total cash consideration of 7.0 billion euros, thereby securing access to one of the fastest growing and most profitable banking markets in Europe. - Full internal funding, including through the cancellation of the 700 million euros share buyback and temporary reduction of the 2025 dividend payout ratio.
- CET1 ratio of >14.25% in 2026 (new 2026 target level.)
- Transaction is significantly accretive to Erste Group’s EPS and ROTE.
