Italy’s largest lender by
assets, UniCredit, has reportedly dropped out of the running to
acquire the German retail division of Sweden’s SEB, having been
outbid by Santander. Spain’s largest lender also continues to be
linked with a possible merger of its US-based Sovereign Bank with
New York-based rival M&T Bank.
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Spanish-based Santander is in pole
position to snap up the loss-making German-based retail unit of
Swedish-based SEB, in a deal worth around €500m ($613.9m).
In a separate development, Santander’s
ambitious expansion plans are again focused on the US market, with
news that it is back in talks with M&T Bank about a possible
merger with its US-based retail subsidiary Sovereign Bank.
Santander has been keen to augment its
German-based interests beyond its successful consumer finance
division for some time.
In 2008, Santander CEO Alfredo Sáenz told
RBI the bank was interested in minor portfolio
acquisitions, particularly in Germany (see RBI 588).
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By GlobalDataWhile SEB has said it will retain its
Baltic-based units in Latvia and Lithuania, the Swedish lender has
been keen to dispose of its troubled German unit since the end of
2009.
In fiscal 2009 the German unit of SEB reported
a loss of SEK715m ($92.2m) and said in a statement, the division
“exhibited very weak performance.”
At the end of 2009, SEB’s German retail
deposits fell by 17% from the corresponding period a year earlier
to SEK48bn; German retail lending dropped by 8.4% to SEK87m.
In the first quarter of fiscal 2010, SEB’s
German retail unit reported a loss of SEK237m but credit loss
provisions fell by 27.5% from the previous quarter to SEK116m.
The possibility of a deal combining Sovereign
Bank with M&T Bank appeared to have ended in May, when the
parties failed to agree the terms of a proposed merger.
At the end of the first quarter of fiscal
2010, Sovereign had total assets of $73.4bn compared to M&T
Bank’s $67.5bn. Sovereign and M&T Bank had deposits of $41.8bn
and $47.4bn respectively.
