MADRID (Reuters) – Santander <SAN.MC> has taken a £350 million majority stake in UK-based Ebury as part of a digital strategy to boost growth through new ventures, the Spanish bank announced on Monday.
Ebury is a trade and foreign exchange facilitator for small and medium-sized companies which operates in 19 countries and 140 currencies, Santander said in a statement.
Santander said it is acquiring 50.1% of Ebury for £350 million, of which £70 million will be new primary equity to support Ebury’s plans to enter new markets in Latin America and Asia.
The bank said it expects a return on invested capital (RoIC) higher than 25% in 2024.
“Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60% of total employment and up to 40% of national GDP in emerging economies,” said Santander executive chairman Ana Botin.
Like banks across Europe, Spanish lenders have turned to more profitable enterprise lending in a bid to lift earnings as low interest rates squeeze financial margins.
Santander is also focusing on emerging economies while cutting costs to counter squeezed margins from ultra-low interest rates in mature European markets.
Santander said Ebury’s existing investors, including co-founders and management, would reinvest in the transaction and the current management team will remain.
Ebury has generated average annual revenue growth of 40% in the last three years, Santander said in its statement.
(Reporting By Jesús Aguado; editing by Jason Neely)