Banco Santander Buys Sovereign Bank for $1.9 BillionBanco Santander, the Spanish banking giant and the fifth most profitable bank in Europe, has purchased the rest of U.S.-based Sovereign Bankcorp. The Spanish bank had previously bought a 25 percent stake in the bank holding company based in Wyomissing, PA., with operations across the Northeast.
A statement by Banco Santander says the acquisition enhances "the geographical diversification of its holding." The Spanish-based bank had made a bid to buy Washington Mutual last month, but WaMu ended up going to JPMorgan Chase. Banco Santander projects that Sovereign will have a net profit of $750 million in 2011. The sale is expected to be finalized in the first quarter of 2009 after approval by both companies' shareholders and regulatory approvals by U.S. and Spain bank regulatory bodies.
Banco Santander is the largest bank in the euro zone by market capitalization, and was fifth in the world by profit in 2007. Banco Santander engages primarily in commercial banking and is involved in global wholesale banking, cards, asset management and insurance. Founded in 1857, the bank has EUR 918,332 million in assets and EUR 1,050,928 million in managed funds, more than 80 million customers, 13,000 branches and a presence in some 40 countries. It is the largest financial group in Spain and Latin America. Through its Abbey subsidiary, Santander is the sixth largest bank in the UK, and is the third largest banking group in Portugal. Its Santander Consumer Finance operates in 20 countries, with its principal focus in Europe.
With the purchase of Sovereign Bancorp, Inc., Banco Santander now has a stake in the U.S. banking industry. Sovereign Bank operates in 8 states with 750 community banking offices and 12,000 employees.