Santander announced that it has agreed to sell its retail and commercial banking franchise in Puerto Rico, Santander Bancorp, to FirstBank Puerto Rico, for a total consideration of approximately $1.1 billion.

Banco Santander Puerto Rico is the fourth largest banking franchise on the Island with a deposit market share of c.8%. It has 27 branches and 1,000 employees, with total assets of $6.2 billion (€5.6 billion).

FirstBank Puerto Rico, which is headquartered in San Juan, is a strong, established and well-regarded bank on the Island. The combined business will offer customers the second largest branch network in Puerto Rico, with combined total assets in excess of $17 billion.

The consideration represents a 1.1x price to total book value, and the transaction is expected to close in the middle of 2020, subject to regulatory approvals. In the meantime Santander will continue to serve its customers as normal. Santander will maintain a presence on the Island, including through Santander Consumer USA, and a retained loan portfolio with a net valuation of $220 million.

Scott Powell, Chief Executive Officer of Santander Holdings USA, Inc. said, "We are pleased to reach this agreement with FirstBank Puerto Rico. FirstBank Puerto Rico shares our values and our commitment to customers, and the local communities. Once completed, the transaction will provide the combined FirstBank Puerto Rico and Santander Bancorp Puerto Rico the ability to offer a broad array of retail and business banking products and services, with the scale to compete through an enhanced branch network to the benefit of both banks' current and future customers."