Santander will absorb its Banesto subsidiary

Banco Santander plans to fully take over its publicly traded affiliate Banco Español de Crédito SA, known as Banesto,

the

Wall Street Journal

reported.

The move will result in the closing of about 700 branches, the

Journal

article said.

A

Financial Times

report

said the merger is expected to save 520 million euros within three years. “Santander has previously stressed the benefits of keeping the subsidiary as a standalone brand in Spain,” the

FT

report said.

Santander, which controls nearly 90% of Banesto shares, will buy the 10.26% of Banesto it doesn’t already own in an all-stock deal, the

Journal

article reported. Santander will replace the Banesto brand with its own and will also replace its own Banif private-banking brand with the Santander brand, the

Journal

report noted.

Santander took over Banesto in 1994 after an accounting scandal at Banesto, one of Spain’s oldest lenders, the

FT

article said.

The

FT

report noted that Ana Patricia Botín, daughter of Santander executive chairman Emilio Botín, was Banesto’s executive chairman before she was named head of Santander’s U.K. subsidiary. Ana Patricia Botín is viewed as her father’s potential successor, the

FT

article said. (Sources:

Financial Times,

Dec. 17, 2012;

Wall Street Journal,

Dec. 18, 2012.)