Banco Santander has decided to absorb its subsidiaries Banesto and Banif under a single brand, as part of restructuring of the Spanish financial system, which will also strengthen its presence in the country and beyond.
Santander, which currently owns 89.74% of Banesto’s share capital will absorb it through a merger, expected to close in May 2013.
The integration of Banif will boost its specialized private banking network in Spain, which has €36bn of assets under management, 550 employees in 52 branches and operates as a 100% owned unit of the Group.
Banco Santander chairman Emilio Botín said the shareholders of Santander and Banesto will receive a premium of 25% and shares, while Banesto customers will get access to the Group’s 14,000 branches globally.
Following the combination of Santander, Banesto and Banif, the group will shut down approximately 700 branches of the three lenders’ total 4,664 offices.
The restructuring process will enable customers of three banks with access to a broader branch network, with 4,000 branches in Spain, while the same will boost Grupo Santander’s growth in both loans and deposits.
Further, it will help lenders to save 10% costs, equivalent to €420m during the third year, while it will also boost revenues by €100m, thus offering total annual pretax synergies of €520m from the third year.