FirstBank Will Buy Santander's Operations In Puerto Rico

First Bancorp (NYSE: FBP), the parent of FirstBank, reached a final agreement with Grupo Santander to acquire the operations of the Spanish bank in Puerto Rico for approximately $ 1,100 million.

The transaction, as reported by Santander, would be completed by mid-2020 and involves FirstBank, the purchase of the fourth largest bank by size of assets in Puerto Rico.

The purchase would consolidate FirstBank as the second bank by size of assets on the island, which would total about $ 17,000 million, it said.


However, until the transaction is completed, customers will carry out their transactions as usual, the Spanish conglomerate reported.

The agreement between FirstBank and Santander represents the definitive consolidation of financial intermediation on the island to only three institutions that offer commercial banking services in all segments and, above all, the end of the presence of international commercial banking institutions in Puerto Rico.

"We are pleased to have reached this agreement with FirstBank Puerto Rico," said Scott Powell, chief executive officer of Santander Holdings USA, the subsidiary of the Spanish conglomerate to which the Puerto Rico operation was attached and is called Santander Bancorp.

"This purchase will significantly increase our scale and competitiveness in Puerto Rico while expanding our fund and risk profile," said Aurelio Alemán, chief executive officer of FirstBank, adding that the institution has been preparing for a transaction of the The importance of acquiring Santander's operations on the island.

Aleman is expected to offer additional details of the agreement tomorrow, Tuesday, when it discloses its financial results for the third quarter of this year.

“Once completed, the transaction will provide FirstBank and Santander Bancorp Puerto Rico with the ability to offer a wide variety of banking services and products, with the scale to compete through an expanded branch network for the benefit of future clients and current, ”Powell said in written statements.

The purchase of Santander's operations in Puerto Rico by FirstBank was discussed in the financial circles of the island for weeks, but the details of the negotiations were kept almost secret. This, because according to sources in this newspaper, most of the decision process took place in Boston. The sale of the Santander operation in Puerto Rico is immaterial from the point of view of profits for the Spanish conglomerate, it was reported.

According to Santander's statement, the institution will maintain a presence on the island through Santander Consumer USA and will maintain a loan portfolio of around $ 220 million.

According to Santander's statement, FirstBank will buy around $ 6.2 billion in assets, including the network of some 27 branches and integrate a thousand employees into its workforce.

The sale of Santander assets in Puerto Rico is announced at the time that OFG Bancorp (NYSE: OFG), parent of Oriental Bank, advances in its plan to integrate the operations of Scotiabank Puerto Rico, a transaction that was announced in the summer past.