Spanish bank Banco Santander and Sweden's Skandinaviska Enskilda Banken (SEB Group) have agreed to the acquisition by Santander Consumer Bank  of SEB’s retail banking business in Germany for approximately €555m.

Banco Santander said the acquisition, which will complement Santander's leadership in consumer finance in Germany with a broader retail banking business, will nearly double the number of branches in Santander Consumer Bank’s network. SEB’s retail network of 173 branches serves 1,000,000 customers, including 10,000 small and medium-sized enterprises. Loans outstanding come to €8.5bn, of which 82% are mortgages. The SEB retail business has deposits of €4.6bn.

Santander Chairman Emilio Botín said: “Germany is a core market for Santander. This acquisition is a significant step toward achieving our goal of being a full-service retail bank in Europe’s largest market.”

Santander Consumer Bank, a unit of Santander's consumer finance division, is a leader in consumer finance in Germany. Through agreements with more than 45,000 distributors, it is the leading independent provider of auto finance and in loans for consumer durables, with 6m customers and a market share of 14% in installment loans. With customer loans of € 22.315bn at the end of 2009, Santander Consumer Bank contributed €385m of net profit to the group's results in 2009, making it Germany’s sixth largest bank by profit.

The transaction is expected to close in 2011 subject to the relevant regulatory approvals.

The acquisition will have an impact of about 10 basis points ).1%) on Santander’s group core capital ratio, which stood at 8.8% at March 31, 2010.

Banco Santander is a retail and commercial bank, based in Spain, with a presence in 10 main markets. At the end of 2009, Santander was the largest bank in the Eurozone by market capitalization and fourth in the world by profit. Founded in 1857 in Santander, Santander had €1,245bn in managed funds at the end of 2009. Santander’s 170,000 employees serve its 92 million customers through 13,660 branches, more than any other international bank. It is the largest financial group in Spain and Latin America, with leading positions in the United Kingdom and Portugal. Santander has a broad presence in Europe through its Santander Consumer Finance arm and in the US northeast through Sovereign Bancorp. In 2009, Santander registered €8.94bn in net attributable profit.