Spanish banking group Banco Santander has acquired rival Banco Popular through a successful bid in an auction held by the Single Resolution Board and Fund for Orderly Bank Restructuring (FROB).

Banco Popular, which was on the verge of collapse, was bought by Santander for a nominal sum of €1. Without any support from taxpayer money, Banco Popular’s resolution will be concluded as a result of its acquisition.

On 6 June, the European Central Bank (ECB) declared that Banco Popular was either failing or likely to fail owing to its recent liquidity situation.

A day after that, the acquisition by Banco Santander has been approved by the European Commission under the bank recovery and resolution rules of the European Union.

According to Santander, the merging of Banco Popular into it will create the largest bank in Spain, both in terms of lending and deposits while having a customer base of 17 million. The two banks will also have a consolidated customer base of more than four million in Portugal.

Banco Santander Group executive chairman Ana Botín said: “We welcome Banco Popular customers as part of the Santander Group and will work hard to continue serving them at the highest standards through the transition and beyond.

“The combination of Santander and Popular strengthens the Group's geographic diversification at a time of improving economic conditions in both Spain and Portugal, and will allow us to continue to deliver for customers and shareholders on all our commitments.”

In Spain, the combined business to be run under the Santander brand will enjoy a market share of 25% in SME lending.

The current management team of Santander Spain will lead the combined entity whose CEO has been named as Rami Aboukhair.

Image: Banco Popular headquarters in Madrid, Spain. Photo: courtesy of Luis García (Zaqarbal)/