Banco Santander SA (STD) is on an acquisition spree. After adding assets across Europe and America, the company has struck a new deal with Sweden’s Skandinaviska Enskilda Banken AB. Santander will buy the Swedish company’s retail banking network in Germany for €555 million ($701 million).
 
This deal is part of Santander’s effort to become a full-service retail bank in Germany. Though the company has its consumer finance business in the country, the deal provides an opportunity to grow through retail-banking services such as mortgages and deposits in this region.
 
The acquisition will double Santander’s number of branches in Germany. As part of the deal, Santander, which now has 144 branch offices in Germany, will take over 173 branches, along with 2,000 employees and around 1 million customers.
 
Under the terms of the deal, Santander will acquire €8.5 billion in loans of which 82% are mortgages, besides €4.6 billion in deposits. The deal is expected to close by the end of 2010 or early next year.
 
For the past two years, Santander has been an active acquirer, and the financial crisis was a blessing in disguise. It provided a welcome opportunity to Santander to acquire assets at a cheaper price; the company responded by adding several businesses in the Continent and America.
 
In the U.K., Santander acquired Alliance & Leicester and parts of Bradford & Bingley during this period. In Germany, the company also acquired the consumer finance business of Royal Bank of Scotland Group plc. (RBS) and General Electric Co. (GE). 
 
To boost its market share in Mexico, Santander has recently announced the buying back of its 24.9% stake in its Mexican arm, Grupo Financiero Santander, from Bank of America Corp. (BAC) for $2.5 billion. The company is also bidding for over 300 branches of the Royal Bank of Scotland Group plc.
 
These deals are in line with the strategic reengineering efforts at Santander. Its home market is experiencing a deep recession and there remain worries over the Spanish sovereign’s debt that resulted in tough financing conditions for the banks of the country. Geographic diversification, therefore, remains an obvious choice for Santander.
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