Spanish banking giant Banco
Santander reached an agreement Friday to buy Allied Irish Banks Plc’s 70% stake
in Poland’s Bank Zachodni WBK for €2.94bn. Santander also agreed to acquire
AIB’s 50% share of BZ WBK Asset Management for €150m. Bank Zachodni WBK is
Poland’s 5th biggest bank.
The sale is a bitter one for Ireland's once biggest bank, humbled by the
devastating property crash. AIB needs to raise €7.4bn in capital by the year end
and it has been in the Polish market for 15 years. Poland is Eastern Europe's
most important emerging economy.
The sales brings
cash of €2.5bn to AIB, leaving €4.9bn to be found from the sale
of a 22.5% stake in US bank MT, its UK business and First
Trust bank in Northern Ireland.
AIB closed with a
value on the Irish Stock Exchange on Friday of €659m compared
with €3.6bn for Bank of Ireland and CRH at €9bn.
Ireland's stake in AIB may end up as
high as 75%.
Banco Santander has emerged from a housing crash in its home base as one of
Europe's biggest banks.
Last December, the European
Commission approved Santander Consumer Finance’s acquisition of AIG’s retail
banking business in Poland.
Banco Santander announced in August
its agreement to buy 318 U.K. branches from Royal Bank of Scotland Group Plc,
putting it in the No. 4 position in terms of branch-network size in the U.K., a
position previously held by HSBC.
Santander, which entered the UK
market when it acquired Abbey National in 2004, during the financial crisis
acquired Alliance & Leicester and Bradford & Bingley at firesale prices. It now
has just over 1,300 UK branch offices.
giant is also a big player in the Latin American market.
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 €1.245trn 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.
Santander has been run by the same family since it was founded in 1857 and at
its annual meeting of shareholders in the Spanish port of Santander last month,
Emilio Botín, the chairman who is 75, said earnings from Brazil will outstrip
profit from the bank’s home market for the first time this year. Botín is
married to Paloma O'Shea, Marquess of O'Shea and Santander is in the region of Spain where most Irish can
trace their origins to.
Finfacts article, Sept 2009:
Irish Central Bank declared its impotence before launch of the euro; Why Spain's
biggest banks survived huge housing boom