Santander takes control of Poland's Kredyt Santander of Spain, the eurozone's biggest bank by market capitalisation, will take control of Poland's Kredyt Bank from KBC of Belgium following a long-awaited deal announced on Tuesday. Santander's Bank Zachodni WBK will merge with Kredyt through a €700m share exchange, to become Poland's number three bank by deposits, loans, branches and profit, Santander and KBC said in a joint statement. The merged bank, with a pro forma value of €5bn, will have 3.5m retail customers and almost 900 branches. The deal is based on an exchange ratio of 6.96 newly issued Bank Zachodni shares for every 100 Kredyt shares. After the merger, Santander will hold 76.5 per cent of the bank, and KBC 16.4 per cent, but KBC intends to dispose of its remaining stake with Santander's help. The agreement accords with Santander's strategy of holding a big retail presence in key markets in both developed and emerging markets, including Brazil, Spain and the UK. "Banco Santander will significantly strengthen its presence in Poland, one of the most dynamic economies in Europe, obtaining the critical mass we seek in our core markets," said Emilio Botín, Santander's executive chairman. Jan Vanhevel, chief executive of KBC - which weathered the financial crisis thanks to a €7bn cash injection from Belgian authorities - said the transaction was another step in implementing a strategy agreed with the European Commission in 2009 to slim down its balance sheet and reduce its risk profile. "Taking the decision to divest Kredyt Bank and to leave the Polish banking market was a very difficult one but difficult times have forced us to make difficult choices," he said. Bank Zachodni is Poland's fifth-largest bank, with assets of 52bn zlotys ($16.8bn) and a market capitalisation of 16.9bn zlotys. Kredyt Bank has assets of 43bn zlotys and a market capitalisation of 3.3bn zlotys. Additional reporting by Jan Cienski in Warsaw