(Bloomberg) -- Banco Santander SA is selling down its stake in its Polish arm Santander Bank Polska S.A as it looks to redeploy capital.
The Spanish lender is offering a 5% stake in the Polish unit with a view to raising around $660 million, according to terms of the deal seen by Bloomberg News. The bank expects proceeds will be used for growth and/or additional share buybacks, the terms show.
Santander will retain a roughly 62% stake in Santander Bank Polska and remain a long-term majority shareholder, describing Poland as a core market, according to the terms.
The Spanish group is targeting paying out 50% of its profit to shareholders via dividends and share buybacks. Since 2021, Santander has repurchased around 11% of its shares.
The share sale comes as the German government is seeking to trim its stake in Commerzbank AG after rescuing the bank during the financial crisis.
Polish banks are set to report a record combined annual profit this year, after earnings for the first seven months of 2024 jumped 65% to 24 billion zloty ($16.7 billion). That’s despite the industry facing legal costs from the Swiss franc loan saga. The country’s lenders already wrote off more than 60 billion zloty in provisions for the foreign currency mortgages as they lose court battles with borrowers over abusive clauses in the contracts.
In the second quarter, Santander’s Polish unit set aside 1.1 billion zloty for the legal costs of the FX loans, cutting its quarterly profit to 795 million zloty.
Citigroup Inc., Goldman Sachs Group Inc. and Santander’s own investment banking arm are arranging the share sale, the terms show.
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