Spain's Santander to sell stake in custody unit - report

MADRID Wed May 14, 2014 4:08am EDT

MADRID May 14 (Reuters) - The euro zone's biggest bank Santander is close to selling a stake in its securities custody business, worth up to 1 billion euros ($1.4 billion) as a whole, to several private equity firms, Expansion newspaper reported on Wednesday.

Warburg Pincus, a U.S. buyout firm which Santander has worked with before, was among those poised to buy a 50 percent stake in the Spanish, Mexican and Brazilian parts of the division, the newspaper said, without citing sources.

Santander and Warburg Pincus declined to comment.

The Spanish bank has previously teamed up with private equity firms in a few of its businesses as a way of raising cash and, in some cases, of expanding them.

"We believe this deal could generate some capital gains," Juan Carlos Calvo, a banking analyst at Espirito Santo Investment Bank, said in a note to clients on Wednesday.

Santander sold half of its asset management unit to Warburg Pincus and fellow private equity group General Atlantic LLC last year, in a bid to expand the business and potentially list it on the stock market, bankers said at the time.

It had already followed that strategy before with Warburg Pincus, which was one of the investors in its U.S. consumer finance business, Santander Consumer USA, which was listed in New York earlier this year.

Expansion said Santander's Global Custody and Securities Services unit - which safeguards financial assets for clients, and helps them manage securities transactions - could be worth between 500 million and 1 billion euros.

The deal would involve the unit's business in Spain, Mexico and Brazil, the newspaper said, although other markets such as Chile, Portugal and Argentina could eventually be included. ($1 = 0.7296 Euros) (Reporting by Sarah White; Editing by Erica Billingham)