Erste Group Expands into Poland: Takeover of Santander Bank Polska worth Billions
The Austrian Erste Group Bank AG has announced a step towards expansion in Central and Eastern Europe. The bank is acquiring a 49 percent stake in Santander Bank Polska for around EUR 6.8 billion and a 50 percent stake in asset manager Santander TFI for a further EUR 200 million. This transaction made Erste Group the third-largest bank in Poland and expanded its customer base in the region to around 23 million people.
Erste Group Bank AG acquires 49 percent stake in Santander Bank Polska and 50 percent in Santander TFI, making it the third largest bank in Poland. / Picture: © Wikimedia Commons / Erstebank / CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/deed.en)
Santander Bank Polska, previously a subsidiary of the Spanish Banco Santander, is the third-largest bank in the country with around 7.5 million customers. It achieved record profits in 2024 and its shares rose to an all-time high at times. Erste Group is entering a market that not only has strong economic fundamentals but also long-term growth prospects. Poland has been regarded as the economic engine of the region for years and has a stable banking system with a high demand for credit and digital innovation.
The acquisition of a 49% stake—equivalent to a controlling influence due to full consolidation—enables Erste Group to enter the market with immediate effect. The agreement also includes Banco Santander acquiring 60% of Santander Consumer Bank prior to closing. In addition, a seller's liability for certain risks was agreed upon, whereby Erste Group can partially hedge against potential special effects.
Financing from own resources - clear capital strategy
The acquisition will be financed entirely from Erste Group's own funds. This is made possible by the cancellation of a planned share buyback program with a volume of EUR 700 million, a temporary reduction of the dividend payout ratio to a maximum of ten percent for the financial year 2025 as well as internal efficiency and balance sheet optimization measures. The bank's common equity tier 1 ratio (CET1) should remain above 13.5% after the transaction is completed and rise above 14.25% again in 2026 - this corresponds to the new target ratio.
According to the bank's internal calculations, earnings per share will increase by over 20 percent in 2026 compared to current market expectations (EUR 7.10 per share). The return on equity (ROE) is expected to be around 16% in 2026, while the adjusted return on equity (ROTE) is even expected to be around 19%. The expected return on investment (ROI) is around 11% - a figure that is also impressive in comparison to alternative uses of capital.
Cooperation with Banco Santander and market reactions
In addition, a strategic cooperation with Banco Santander was agreed, targeting selected core regions. This includes the areas of corporate and investment banking as well as payment transactions. The partner banks intend to bundle their respective strengths - Erste Group in Central and Eastern Europe, Santander in Western Europe, and North and South America. The cooperation is intended to open up new customer potential and access to local networks for both groups.
The stock market reacted to the announcement with optimism: Erste Group shares rose by more than six percent during the course of the day. At the same time, the shares of Santander Bank Polska lost around five percent in value, which is seen as a typical reaction to changes of control and strategic restructuring. Analysts see the transaction as a substantial upgrade of Erste Group's business model and praise the consistent implementation of the regional growth strategy.
By entering Poland, Erste Group is continuing its long-term strategy of establishing itself in the most profitable markets in Europe. The acquisition marks a milestone in the Austrian banking group's expansion policy and underlines its claim to leadership in the Central and Eastern European banking sector.