Banco Santander, Spain’s largest lender, has reached an agreement to acquire an 8-percent stake in Bank of Shanghai (BoS) from HSBC in a deal worth an estimated 470 million euros.
The transaction includes a cooperation agreement under which Santander will provide BoS with a permanent team of professionals to jointly develop wholesale banking activities.
Santander said the deal will make it the second-largest shareholder in BoS. The cost of the operation will shave one basis point off its capital ratio.
The deal is subject to approval from the China Banking Regulatory Commission and is expected to be completed in the first half of next year.
BoS is the second-biggest urban commercial and retail bank in China, with total assets of 98 billion euros. It made a net profit last year of 902 million euros. The bank has a total of 294 branches, 231 based in Shanghai, where its headquarters and 70 percent of its assets are located, and is present in 10 other Chinese cities. It has 8 million personal-banking customers and almost 200,000 corporate customers, most of which are small and medium-sized companies.
In May, Santander received clearance to buy a 20-percent stake in the Bank of Beijing’s consumer finance subsidiary, making Santander the second-biggest shareholder, while in March, Fortune Auto Finance, a joint venture between Santander and the Chinese car manufacturer Anhui Jianghuai Automobile (JAC), officially started operations.