Santander has reached an agreement with Warburg Pincus and General Atlantic to buy back the 50% of its asset management arm it sold to the private equity firms in 2013. The price of the transaction is not known. But a few months ago, when the bank’s strategy was focused on the failed merger with Pioneer (a subsidiary of Unicredit), Santander Asset Management was valued at €2.6 billion (equivalent to 2,4 years of commission income).
Santander AM has €170 billion in assets under management and is present in 11 countries in Europe and Latin America. Spain’s biggest bank also plans to sell or list its stake in the funds’ platform Allfunds Bank. It owns 50% of this entity along with Intesa, Warburg and General Atlantic.
Allfunds Bank has €215 billion in assets and is present in Spain, Italy, the UK, Switzerland, Luxembourg, Chile, Colombia and the United Arab Emirates. Allfunds Bank is estimated to be worth €1.7 billion (about 16 times EBITDA). Bankinter analysts say: “if these figures are confirmed, the net amount the bank would pay for full control of its asset management arm would be reduced (around €900 million). And the impact on the CET-I “fully loaded” capital ratio (currently at 10.47%) would be limited (-11 basis points in 2017 according to Santander’s own estimates). This would allow for an increase of 5% in the bank’s total commissions’ income (this represents about 24% of typical revenues), according to our estimates.”
Banco Santander expects the deal to improve EPS by over 1% and provide a ROI of 20% in 2018.
