BAC Agrees to Buy Santander's 100M Euro Real Estate Portfolio

Bank of America BAC has agreed to acquire a €100-million ($118 million) Spanish real estate loan portfolio from Banco Santander, S.A. SAN, marking its second such deal with the Spanish lender this year. The transaction, finalized with advisory support from Colliers International Group, is part of Santander’s broader plan to streamline its balance sheet by divesting €40-€45 billion in risk-weighted assets in 2025.

The deal underscores BofA’s strategy of selectively adding European real estate exposure while Santander continues to focus on capital optimization and risk management.

Strategic Rationale for Bank of America

For BAC, the acquisition provides a foothold in Spain’s real estate lending market at a time when European property assets are being repriced amid shifting interest rates.

Earlier this year, BofA also purchased a portfolio of hotel-related loans from Santander, suggesting a deliberate effort to expand in specialized real estate lending. This move can help BAC diversify its asset base and capture higher yields from European commercial real estate loans.

Santander’s Balance Sheet Goals

SAN is using the transaction to accelerate its de-risking efforts. The Spanish bank has been actively selling loan portfolios and transferring risk to strengthen capital ratios and free up resources for core lending businesses.

In addition to this deal with Bank of America, Santander has sold distressed loan portfolios to Goldman Sachs GS and Morgan Stanley MS in recent months.

GS acquired approximately €460 million ($534 million) in Spanish mortgages from Santander. Morgan Stanley has also been active in acquiring distressed mortgage portfolios from Spanish banks, including the €900-million deal with Santander, alongside earlier purchases from other Spanish lenders.

By executing these transactions, Santander aims to improve capital efficiency while reducing its exposure to cyclical sectors like real estate.

BAC’s Price Performance & Zacks Rank

Over the past six months, shares of BofA have gained 22.7% compared with the industry’s 28.9% growth.

Currently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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