Santander to Buy Stake in Bank of Shanghai for $647M

Banco Santander has reached a cooperation agreement with Bank of Shanghai to buy an 8% equity stake in Bank of Shanghai (BoS). The transaction, which is subject to approval from the China Banking Regulatory Commission, will make Santander the second-largest shareholder in BoS and its strategic international partner, according to Santander.

The operationis expected to be completed in the first half of 2014. The cost of the investment is estimated at approximately EUR 470 million. The transaction will have an impact of approximately 1 basis point on the Santander Group’s capital.

Santander will provide BoS with a permanent team with experience in risk management and commercial and retail banking. The two will develop joint wholesale banking activities.

BoS is the second-biggest urban commercial and retail bank in China, with total assets of EUR 98 billion and a net profit of EUR 902 million at the end of 2012. It is also the only urban, Chinese bank with a branch presence in the Shanghai Free Trade Zone. It has 8 million personal banking customers and almost 200,000 corporate customers, most of which are small and medium-sized companies.