Erste Group Buys Santander Bank Polska for $7.72 Billion

Vienna-based Erste Group, one of the leading financial services providers in the eastern part of the European Union (EU) on Monday said that it has acquired controlling stake of 49% in Santander Bank Polska in an all-cash transaction for $7.72 billion.

By this, Erste Group became the third largest bank in Poland with significant and immediate improvement in profitability and growth profile as the company has enlarged Central and Eastern Europe (CEE) growth footprint.

Erste Group also acquires 50% in asset management firm Santander TFI for an approximately $227.19 million in cash consideration. Banco Santander will keep the 13% stake in its Polish unit and acquired 60% in Santander Consumer Bank from Santander Bank Polska prior to completion of the acquisition by Erste Group.

The agreement includes an indemnity for the majority of Erste Group’s share of potential CHF provisions beyond levels expected in the business plan.

Consistent Strategy             

The transaction significantly extends Erste Group’s exposure to the fastest growing and most profitable banking markets in Europe (CEE) with a multi-decade economic convergence/growth profile.

It also confers critical mass on entry, in line with Erste Group’s strategic focus to be among the leading banks in any of its markets. Poland has a strong economic track record, and the Polish banking sector is on a long-term growth trajectory.

Erste Group Chief Executive Peter Bosek said that with the proposed acquisition of a controlling stake in Santander Bank Polska they were fulfilling a longstanding strategic goal of becoming the leading lender in CEE region.

“We continue to broaden our presence in the region and expand into one of Europe’s most dynamic and profitable banking markets,” he added.

Full Internal Funding

Erste Group will fund the acquisition exclusively from internal resources, supported by cancellation of planned $794.87 million share buyback announced on 28 February 2025, application of a temporarily reduced dividend payout ratio of maximum 10% to 2025 net profit and various balance sheet optimisation measures, resulting in an expected CET1 ratio upon closing of the transaction (estimated around year-end 2025, subject to closing conditions).

The dividend for the business year of 2024 remains unchanged at $3.41 per share, payable on 28 May 2025 subject to annual general meeting approval.

Erste Group targets to return to the current dividend payout range of 40%-50% from the 2026 business year.

About Erste Group

Erste Group, which has around 45,000 employees serve nearly 16 million customers in over 2,000 branches in 7 countries (Austria, Czechia, Slovakia, Romania, Hungary, Croatia and Serbia). The Erste Group had $280.4 billion in total assets, posted a net profit of $1.87 billion and had a common equity tier 1 ratio of 14.2%.