Banco Santander has announced that with its purchase of Banco Popular for €1, it has become the largest bank in Spain and Banco Santander Totta now is the largest private bank in Portugal in terms of assets.
In today's statement, the institution said that Banco Santander Totta will incorporate Banco Popular Portugal, "creating the conditions to further develop its activity to support Portuguese families and companies," and admitted that 3,000 people will lose their jobs.
"The decision guarantees the customers of Banco Popular Portugal and its 1,000 employees the benefits of the solidity and confidence attributed to Santander Totta," reads the glowingly wonderful press release.
With the purchase, Banco Santander Totta now has a market share of around 17%, becoming the largest Portuguese private bank in terms of assets and lending and one of the largest in terms of resources.
The acquisition, according to Santander Totta also contributes, "once again, to the stabilisation of the Portuguese financial system."
Santander bought 100% of Banco Popular for €1, after the European Central Bank realised Banco Popular could not continue under its own steam and needed to guarantee deposits.
This decision guarantees "the safety of Banco Popular depositors and the lack of impact on Spanish public finances," although shareholders have lost the lot.
Banco Santander says that with this acquisition "more than 21 million customers in both countries will benefit from a much wider network of branches and a broader range of products and services."
To enable the purchase, the Board of Directors of Banco Santander approved a capital increase of €7 billion, which will guarantee the capital and the necessary provisions for Banco Popular to operate normally.
This, of course, will involve branch closures in areas where Santander and Banco Popular branches are near to each other.
The bank already has announced that 3,000 people will lose their jobs under a voluntary termination programme and early retirement.
Santander plans to shave 33% off the cost of running its Banco Popular's branches in Portugal. Popular has about 900 employees in Portugal and 12,000 in Spain - expect more lay-offs and closures.
