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Banco Santander buys Portugal’s Banif

Banco Santander is buying the lending operations of Portugal’s Banif-Banco Internacional do Funchal for 150 million euros ($163 million). Banif’s clients and branches will be transferred to Santander as part of the deal. Santander had considered a purchase of Novo Banco, the bank that emerged from the breakup of Banco Espirito Santo, without making an offer. While the sale was suspended, Santander will analyze it again if the process restarts. Meanwhile, Bank of Portugal, said ‘problematic assets’ will not be transferred to Santander and will go to an asset management vehicle. A ‘very restricted’ set of assets will remain at Banif to be liquidated in the future, as well as subordinated debt. The purchase will increase Santander’s market share in Portugal by 2.5 percentage points to 14.5% in loans and deposits. In 2013, the Portuguese government had infused 1.1 billion euros into Banif after the lender was unable to raise enough capital to meet a regulatory threshold. The bank has since increased its buffers, helping the government cut its stake to 60.5%.

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