Spain-based Banco Santander and Skandinaviska Enskilda Banken (SEB Group) have agreed to the acquisition by Santander Consumer Bank of SEB’s retail banking business in Germany for approximately EUR555m.

The acquisition is expected to nearly double the number of branches in Santander Consumer Bank’s network in Germany.

SEB’s retail network of 173 branches serves 1,000,000 customers, including 10,000 small and medium-sized enterprises. Loans outstanding come to EUR8.5bn, of which 82% are mortgages. The SEB retail business has deposits of EUR4.6bn.

According to Santander, the transaction is expected to close in 2011 subject to the relevant regulatory approvals.

The acquisition is expected to have an impact of about 10 basis points on Santander’s group core capital ratio, which stood at 8.8% at March 31, 2010.

Emilio Botin, chairman of Santander, said: “Germany is a core market for Santander. This acquisition is a significant step toward achieving our goal of being a full-service retail bank in Europe’s largest market.”