Loading...
See More

Santander absorbs Spanish subsidiaries

Dec 17 2012 04:56 AFP
Austerity protesters

Protestors shout slogans during a demonstration against government-imposed austerity measures and labour reforms in the public healthcare sector in Madrid, Spain. (Andres Kudacki, AP)

Related Articles

Spain rejects proposed budget cut

Spain sinks deeper into recession

S&P downgrades Spain two notches

Eurozone is shaping up - study

Bailout for Spain looms

Spain unveils price of banking rescue

 

Madrid - Banking giant Banco Santander announced on Monday it will absorb its Spanish offshoots Banesto and Banif, closing 700 branches and saving an estimated €520m a year.

Santander, the biggest bank in the eurozone by market value, said the offshoots would be absorbed into the Santander brand, which would boast 4 000 branches under the same name in Spain.

Santander, which already owns 89.74% of Banesto, said it would pay the offshoot's minority shareholders with Santander stock, offering a premium of 25%.

"This is a good transaction for everyone," chairperson Emilio Botin said in a statement, noting the premium to be paid to Banesto minority shareholders, the global network available to customers and the international opportunities opened up to staff.

"This transaction is part of the restructuring of the Spanish financial system, which involves a significant reduction in the number of competitors and the creation of larger financial institutions," the bank said.

Spain's eurozone partners agreed in June to provide up to €100bn to rescue the crippled banking system, overloaded with bad loans extended during a housing bubble that popped in 2008.

Santander said its merger with Banesto and with its fully owned Banif unit would led to the closure of about 700 of the three banks' 4 664 branches.

But the group said it would lower job numbers gradually without "abrupt cuts".

The restructuring would save about 10% in costs, or €420m in the third year, it said. Revenues were expected to rise by €100m in the same timeframe.

The lower costs and higher revenues would mean pre-tax "synergies" of €520m from the third year, it said.

"The merger will add value from the start, increasing earnings per share by 3% in the third year," Santander said.

Despite the cuts to the network, Santander said its share of Spain's bank branches would actually rise because of the contraction of the industry overall.

Santander expected its market share to rise from 10% of branches in 2008 to 13% in 2015. At the end of 2015, Spain would have an estimated 30 000 branches overall, it said, a decline of 35%.

Santander said the mergers would also provide new strengths in its relations with business, noting Banesto's expertise in the financing of small and medium-sized businesses and Banif's leadership in private banking with €36bn of assets under management.


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

spain  |  banks
NEXT ON FIN24X

 

Lastest Articles

Here is how to check your credit score and manage it Read More...
Top tips to save money over the festive period Read More...
These are the top 5 most fuel efficient cars in SA Read More...
What to consider when switching medical aid schemes Read More...
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...