Banco Santander to buy SEB AB banking units for €555m

Buying SEB AB

Spain's largest lender, Banco Satander SA, is reportedly to buy 173 German bank branches from SEB AB for around €555 million (US$699 million) in a bid to expand across the continent.

If the transaction, set to be completed in 2011, goes through it will alter the Spanish bank's standing in Europe with the number of branches essentially doubling.

It is the latest in a year of mergers for Santander, who is also currently bidding for about 300 RBS branches in the U.K. after it bought €2.52 billion in auto loans from Citigroup Inc. and bought back almost a quarter of its Mexican unit from Bank of America Corp. for €1.96 billion (US$2.5 billion).

If Santander does succeed with the SEB purchase, it will gain €8.5 billion in loans and €4.6 billion in deposits as well as extending the reach of their German branches, which have primarily been consumer financed focused.

"Strategic growth areas"

As well as the logistical and technological issues of the merger, the sale is set to free up a substantial amount of SEB capital that, according to Chief Executive Officer Annika Falkengren, will "be reinvested in SEB's core strategic growth areas."

In a statement, Falkengren said, "Germany, the largest economy in Europe, remains an important market for us. We have been present there for nearly 35 years and going forward we will focus on merchant banking and wealth."

Santander is one of Europe's biggest banks and has often been at the forefront of technological innovation within the industry. Its HQ, Santander City, is described as "a creative mix of advanced robotics, hi-res LED paneled columns and interactive interface design", where technology is used to learn and work on the money markets of the world.

Santander said it currently has 176 retail branches and 6 million customers in Germany where it says it's the leading financier of durable goods.

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