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Santander buying SEB's German branches

Santander buying SEB's German branches
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Spain’s largest lender Santander is buying Sweden’s SEB retail banking division in Germany for 555 million euros.

Chairman Emilio Botin said: “This is a significant step toward achieving our goal of being a full service retail bank in Europe.”

SEB has 173 branches and one million customers in Germany.

It said it was selling to focus on its German merchant banking and wealth management business.

The purchase will double the size of Santander’s German branch network.

The sale came as the head of Italy’s biggest bank, Unicredit, called for a 20 billion euro privately financed bank recovery fund.

Alessandro Profumo said it would be used to bail out failed banks.

He suggested the money could be raised by voluntary contributions from top European banks and would not require funding from European authorities or member states.

“The option for authorities to use the fund to stabilise one or a few large, ailing banks can assure the market that the crisis can be contained at an early stage,” Profumo wrote in an article in the Financial Times.

“The fund would be one of the three necessary elements to avoid intervention in the next financial crisis: a supervisory and regulatory system that prevents, as much as possible, the causes of systemic crises.”

He said the fund would act as “an effective system of crisis management” used to avoid contagion.

The European Union is in the process of drafting plans for a network of national bank resolution funds, based on a bank tax, which would pay for the winding up of ailing banks so that taxpayers don’t foot the bill in the future.

Profumo said last month that a European Union-backed tax on bank to help pay for the financial crisis was “deeply mistaken.”