Erste Group Expands in Central Europe with $7.7 Billion Stake in Santander’s Polish Operations

Austrian lender Erste Group Bank has announced the acquisition of a 49% stake in Santander Bank Polska, the Polish subsidiary of Spain’s Banco Santander, for approximately €6.8 billion ($7.7 billion).

In a parallel deal, Erste will also acquire 50% of Santander’s Polish asset management arm, Santander TFI, for €200 million.

The transactions are part of a broader strategic partnership between the two European banking giants. The all-cash purchase—valuing Santander Bank Polska at 2.2 times its projected tangible book value for Q1 2025—was funded entirely through Erste’s internal resources. This was supported by the cancellation of a previously announced €700 million share buyback program and additional balance sheet optimization measures.

Following the news, shares of Erste Group rose by over 6%, reflecting investor approval of the bank’s expansion into one of Europe’s more dynamic banking markets. Meanwhile, shares in Santander Bank Polska dropped approximately 5% on the Warsaw Stock Exchange, though the Spanish parent company’s stock edged up 0.3%.

As Poland’s third-largest bank by assets and one of its most profitable, Santander Bank Polska offers Erste a strengthened footprint in Central and Eastern Europe—regions where Erste already maintains a significant presence and sees strong growth potential. Poland’s higher interest rate environment, in contrast with the European Central Bank’s current dovish stance, adds to the market’s attractiveness.

The acquisition does not trigger a mandatory takeover bid under Polish law, as Erste’s stake remains below 50%.

In addition to the equity transactions, Santander and Erste have outlined a strategic cooperation agreement in the areas of corporate and investment banking (CIB) and digital payments. The deal grants Erste access to Santander’s global payments platforms, further enhancing cross-border service capabilities.

Banco Santander, the eurozone’s largest bank by market capitalization, plans to use the proceeds from the deal to accelerate growth in Europe and the Americas. The Spanish bank has also announced that it will return 50% of the capital released from the sale—approximately €3.2 billion—to shareholders through share buybacks. This contributes toward its target of up to €10 billion in buybacks by 2026.

With input from CNBC, the Wall Street Journal, and Reuters.