Erste Group acquired a 49% stake in Santander’s Polish bank for approximately €6.8bn, the Austrian lender said on May 5.

The Austrian bank, the country’s largest, also agreed to purchase 50% of Santander’s Polish asset management business for €200mn. Erste limited the acquisition to avoid triggering a mandatory takeover bid for the remaining shares.

Prior to closing the transaction, Santander plans to acquire a 60% stake in Santander Consumer Bank from Santander Bank Polska, gaining full ownership.

The agreement values Santander Bank Polska at about €13.9bn, equivalent to 2.2 times its projected tangible book value per share for the first quarter of 2025. It represents a 7.5% premium to the May 2 closing price, excluding dividends, Santander said.

Peter Bosek, chief executive of Erste Group, said the transaction would bolster Erste’s position in the region and achieve a long-standing strategic aim.

Erste plans to finance the purchase from internal resources, helped by the cancellation of a €700mn share buyback and a temporary cut in dividends. The bank expects the transaction to boost earnings per share by over 20%.

The deals free up capital for Santander and expand Erste’s presence in central Europe. 

Santander said it expects to book a net capital gain of around €2bn by the end of 2025. It intends to distribute 50% of the released capital to shareholders, equivalent to a buyback of about €3.2bn, supporting its goal to repurchase up to €10bn of shares by 2026.

The two banks also announced a strategic partnership in corporate and investment banking and agreed that Erste would gain access to Santander’s global payments network.

Shares in Erste rose 5.1% in Vienna on May 5. Santander shares in Warsaw climbed nearly 1.7%, while Santander Bank Polska stock fell 6.7%.

Poland’s Financial Supervision Authority (KNF) welcomed the deal.

"The KNF is pleased to see transactions that demonstrate investors’ positive perception of the banking sector in Poland and their optimistic view of its future development prospects," Jerzy Jastrzębski, head of the KNF, wrote on X.

"We also believe that the arrival of new investors in the banking market may contribute to greater competitiveness in the sector and lead to the enrichment or improvement of services offered to its customers," Jastrzębski also said.

Poland’s economy remains one of the fastest growing in Europe, supported by strong domestic demand and double-digit wage growth. According to the KNF, Polish banks posted a net profit of PLN42.18bn (€9.8bn) in 2024, up 50.9% from the previous year.

Erste operates across seven countries in central and eastern Europe, including Hungary and Romania.