Banco Santander to Buy Back 50% Stake in its Asset-Management Unit

By Jeannette Neumann and Simon Clark 

MADRID -- Banco Santander SA has agreed to buy back the 50% stake in its asset-management unit that it sold to two private-equity firms in 2013.

Santander said the sale by Warburg Pincus LLC and General Atlantic would allow the bank to have full control of the asset manager's EUR170 billion of assets under management. Santander had sold the stake to both firms 3 1/2 years ago in a transaction that valued the unit at EUR2 billion.

Santander didn't disclose on Wednesday in a regulatory filing how much it would pay Warburg Pincus and General Atlantic to take full ownership of the asset manager.

Santander said it expects a negative impact of 11 basis points to its core Tier 1 capital ratio by the end of this year. Analysts have said Santander's buyback makes sense as the company steps up its focus on generating more fees on asset management products as European banks confront low interest rates and slack demand for loans.

Santander also said that Warburg Pincus and General Atlantic had agreed to work on the sale of their stakes in Allfunds Bank, SA, an investment fund platform.

Allfunds is 50% owned by Santander Asset Management and 50% by Italian bank Intesa Sanpaolo SpA. Santander said the bank and its partners are considering a sale or an initial public offering of Allfunds. Intesa also confirmed Wednesday that it is weighing a sale of its Allfunds stake.

The Wall Street Journal had reported that Santander was in talks to buy back a 50% stake in its asset-management unit on Nov. 2.

Write to Jeannette Neumann at [e-mail] and Simon Clark at [e-mail]

(END) Dow Jones Newswires

November 16, 2016 13:21 ET (18:21 GMT)

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