(Alliance News) - Banco Santander SA on Monday unveiled a deal to sell a stake in its Polish offering to Erste Group Bank AG.

Erste will acquire 49% of Santander Bank Polska and 50% of the Madrid-based lender's Polish asset management business TFI for a total cash sum of EUR7 billion.

"Santander and Erste are also announcing a strategic cooperation to leverage each firm's strengths and footprint in corporate & investment banking, and to allow Erste to gain access to Santander's global payments platforms," Santander said.

"Following the transaction, Santander will own [around] 13% of Santander Polska and intends to take full ownership of Santander Consumer Bank Polska."

The lender said it plans to distribute 50% of the capital released from the deal to shareholders by accelerating share buybacks "equivalent to approximately EUR3.2 billion".

Executive Chair Ana Botin said: "This transaction is another key step in our strategic focus on shareholder value creation which is based on both accelerating our platform strategy through ONE Transformation and growing the group's scale in geographies with highly connected markets. For Santander, we crystallise value at highly attractive multiples. For Erste, they are acquiring an outstanding business with above all, a world class team, which I am confident will continue generating value for Santander Polska's customers, employees and stakeholders.

"We will deploy the capital generated from the transaction in line with our capital hierarchy, prioritizing profitable organic growth. We plan to devote 50% of proceeds to accelerate the delivery of our planned extraordinary shareholder buybacks to early 2026, as well as to potentially exceeding the previously announced total share buyback target of up to EUR10 billion given the attractiveness of buybacks at current valuations, subject to regulatory approvals."

Shares in the company were 0.9% higher at EUR6.40 each in Madrid on Monday morning.

By Eric Cunha, Alliance News news editor

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