Bank of America has agreed to purchase a €100 million ($118 million) real estate loan portfolio in Spain from Banco Santander. The deal, announced on September 19, 2025, marks the second significant asset purchase by the American bank from its Spanish counterpart this year.
This transaction is a key component of Santander's strategy to reduce its risk-weighted assets, while Bank of America continues to selectively expand its presence in the European commercial real estate market.
Key Takeaways
- Bank of America (BAC) is acquiring a €100 million Spanish real estate loan portfolio from Banco Santander (SAN).
- This is the second portfolio BAC has purchased from SAN in 2025, signaling a targeted expansion in European real estate.
- Santander aims to divest €40-€45 billion in risk-weighted assets in 2025 to strengthen its balance sheet.
- The deal follows similar asset sales by Santander to other major investment banks, including Goldman Sachs and Morgan Stanley.
Details of the Acquisition
The agreement involves a portfolio of real estate loans valued at €100 million. According to official statements, the transaction was finalized with advisory services provided by Colliers International Group, a global commercial real estate services firm.
This purchase represents a strategic move for Bank of America, allowing it to increase its exposure to the Spanish property market. It follows a similar transaction earlier in the year when Bank of America acquired a portfolio of hotel-related loans from Santander, indicating a consistent interest in specialized European real estate assets.
Strategic Timing in a Shifting Market
The acquisition comes as European property assets are undergoing a period of repricing. Shifting interest rate environments have created new opportunities for investors to acquire loan portfolios at potentially advantageous valuations. Bank of America's move suggests confidence in the long-term value of the Spanish real estate sector.
Bank of America's Expansion in Europe
For Bank of America, this acquisition is more than just a single transaction; it is part of a broader strategy. By purchasing these loans, the U.S. banking giant gains a direct foothold in Spain's real estate lending market. This move helps diversify its global asset base and provides an opportunity to capture potentially higher yields from European commercial real estate loans compared to other markets.
The focus on specialized portfolios, such as the previously acquired hotel loans and this new real estate package, suggests a deliberate and calculated approach. Rather than broad market entry, Bank of America appears to be targeting specific segments where it sees the most potential for growth and return on investment.
A Pattern of Acquisition
This is the second major loan portfolio Bank of America has purchased from Santander in 2025. This repeated business relationship highlights a strategic alignment where one bank's divestment goals meet another's expansion objectives.
Santander's De-Risking Strategy
On the other side of the deal, Banco Santander is executing a clear and ambitious plan to optimize its balance sheet. The Spanish lender has publicly stated its goal to divest between €40 billion and €45 billion in risk-weighted assets during 2025.
This large-scale divestment program is designed to achieve several key objectives:
- Strengthen Capital Ratios: By selling off non-core or higher-risk assets, Santander improves its capital adequacy ratios, making the bank more resilient.
- Reduce Cyclical Exposure: Real estate is often a cyclical sector. Reducing exposure helps insulate the bank from potential market downturns.
- Free Up Resources: The capital unlocked from these sales can be redeployed into Santander's core lending businesses, such as retail and corporate banking.
This transaction is a step toward achieving these goals, demonstrating the bank's commitment to its de-risking and capital efficiency targets.
A Wider Trend of Asset Sales
Santander's deal with Bank of America is not an isolated event. The Spanish bank has been actively offloading loan portfolios to several major international financial institutions in recent months as part of its balance sheet management.
Other significant transactions include:
- Goldman Sachs (GS): Acquired a portfolio of approximately €460 million ($534 million) in Spanish mortgages from Santander.
- Morgan Stanley (MS): Engaged in a €900 million deal for a distressed mortgage portfolio, also from Santander.
These sales to Bank of America, Goldman Sachs, and Morgan Stanley illustrate a broader trend of European banks cleaning up their balance sheets, while U.S. investment banks see an opportunity to acquire assets at new valuations.
This activity highlights a dynamic market where assets are being transferred from European banks focused on capital strength to international investors seeking yield and strategic market entry. Morgan Stanley, in particular, has been an active buyer of distressed mortgage portfolios from several Spanish lenders, not just Santander.
Market Performance and Outlook
From an investor perspective, Bank of America's stock performance reflects a period of steady growth. Over the last six months, shares of BAC have seen a gain of 22.7%. While this is a strong performance, it slightly trails the broader industry's growth of 28.9% over the same period.
Currently, Bank of America holds a Zacks Rank #3 (Hold), indicating that analysts see the stock as likely to perform in line with the market in the near term. The strategic acquisitions in Europe could, however, influence its long-term growth trajectory as the bank continues to diversify its revenue streams and asset holdings internationally.
