Bank Zachodni, the Polish subsidiary of Spanish lender Banco Santander, has agreed to purchase the private banking and retail operations of Deutsche Bank Polska for €305m.

The deal includes Deutsche Bank’s Polish retail and private banking assets, SME business, asset management unit and sales network. It also includes DB Securities (Poland), but excludes Deutsche Bank Polska’s foreign currency mortgage portfolio.

The acquisition will add around €4.4bn in assets, €4.3bn in loans and €2.5bn in customer deposits to Santander’s books. The combined entity will have nearly €39.8bn in assets, €30.3bn in loans and €28.3bn in customer deposits.

A total of 113 branches and 1,500 staff will migrate to Santander as part of the deal.

Santander said that the deal will make Bank Zachodni the third largest financial entity in Poland and also the country’s leading private banking services provider. Following the takeover, Bank Zachodni will have a customer base of 6.8 million and market share of more than 11.7% in loans and 11% in deposits, the Spanish lender said.

Deutsche Bank will retain its corporate and investment bank business in Poland, including global transaction banking. The German lender said that the sale is aimed at reducing complexity.

The transaction is expected to be concluded by the end of 2018, subject to regulatory nod. Santander anticipates the acquisition to offer a return on investment of 15% by 2021 but said that the deal will not affect its capital ratios.

Banco Santander executive chairman Ana Botin said: “The Polish economy has been among the strongest in Europe and we see significant potential to grow our business further in the coming years. The acquisition enhances our position in important customer segments, such as private banking and SMEs, while also delivering strong returns for our shareholders.”