Acquisition
Banco Santander Central Hispano SA
20 November 2000
RELEVANT FACT
Grupo Santander Central Hispano has won the control of Banco del Estado de Sao
Paulo (Banespa) by acquiring the 30% of its capital put up for sale by the
Brazilian government and 60% of the voting rights.
Grupo Santander Central Hispano's winning bid was 7,050 million reals,
equivalent to US$ 3,550 million.
The acquisition of Banespa fits within Grupo Santander Central Hispano's
strategy of strengthening its presence in Brazil, a country with a population of
166 million and a GDP US$666 billion that accounts for 35% of the total Latin
American economy.
More than half of Brazil's population, generating three-quarters of its wealth,
lives in the six States of the south-south east region of the country, where the
Group has concentrated its operations. Minas Gerais, Rio de Janeiro, Sao Paulo,
Santa Catarina, Parana and Rio Grande do Sul. Among these, Sao Paulo, with 36
million inhabitants and a GDP of approximately US$200 billion, is Latin
America's principal economic and financial centre. It has an adjusted per
capita income of US$8,564, as well as 45% of the nation's banking deposits and
40% of bank branches. Sao Paulo is one of the vital hubs of the Mercosur
corridor (Argentina, Brazil, Paraguay and Uruguay) and Chile.
Grupo Santander has operated in Brazil since 1982, expanding in 1991 in the
areas of treasury and capital markets. In 1997 it moved into retail banking
with the acquisition of Banco Geral do Comercio, buying Banco Noroeste a year
later and Grupo Fianciero Meridional early this year.
Hanespa was founded in 1909 and has since then been closely linked with the
economy of the State of Sao Paulo, where the bulk of its 573 offices and 2 8
million customers - mainly individuals and small and medium sized companies -
are located. Its US$15.5 billion in assets US$ 6.1 billion in deposits, US$ 2.4
billion in loans and US$3.6 billion in managed funds make it the leading private
sector bank in the country's most prosperous region.
Banespa, which will operate autonomously within the Group alongside Banco
Santander Brasil, will have the support of Santander Central Hispano in
enhancing the services it offers to its markets. Its contribution to the
economy of the State of Sao Paulo will be strengthened with a renewed,
differentiated and innovative range of products and financial services, backed
up by the technology and experience that Santander Central Hispano has developed
in the 38 countries where it operates.
With this acquisition, Santander Central Hispano becomes the third largest
private financial group in Brazil, with US$30 billion in assets, US$9.5 billion
in deposits, US$5.2 billion in loans and US$6.6 billion in managed funds.
The Group will have 1,970 offices and points of sale throughout the country,
including a branch network of 900 offices in the States of the South and
Southeast of the country. It thus acquires an optimum size to compete and
develop the value of its franchise in Brazil, based on the significant market
shares it has in the five most dynamic States of the country 9% in assets, 7.2%
in deposits, 6% in mutual funds and 5% in loans. In the State of Sao Paulo, the
Group becomes the leading bank with a market share in assets of 9.4%, 11.2% in
deposits, 10.1% in mutual funds and 4.8% in loans.
Madrid, November 20, 2000
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