Banco Santander has reached an agreement to acquire Bank of America's 24.9% stake in Santander Mexico for $2.5bn in cash.

Following the transaction, Banco Santander’s stake in the Mexican unit will be 99.9%. The transaction, which must be approved by the relevant regulators, is expected to be completed within 90 days.

Banco Santander sold the 24.9% stake to Bank of America in 2003 for $1.6bn,

valuing the bank at $6.4bn. Seven years later, the current transaction values the Mexican unit at $10bn, an increase of 56%.

Santander Mexico has been part of Grupo Santander since 1997. With full ownership of the bank, Mexico’s contribution to Grupo Santander profit will increase by two percentage points, to 7%.

Emilio Botin, chairman of Banco Santander, said: “This acquisition reinforces Santander’s commitment to Mexico, a country with a very positive outlook for growth, and furthers the geographic diversification of our group.”