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Banco Santander to buy into US east coast retail banking market

25th October 2005
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Banco Santander, the biggest bank in Spain, is to buy a 20% stake in the Philadelphia, US based bank Sovereign Bancorp for $2.4 billion.

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The Spanish banking titan, which previously had a footprint in the US in the 1990s, will pay $27 per share for its initial 20% holding. However, according to reports, the stake could be increased to 25% by next year with a follow up 100% takeover possible within three years.

Sovereign Bancorp has assets of $74 billion. It made a pre-tax profit of $581 million last year but this is set to increase as the bank has just purchased Brooklyn, New York-based Independence Community Bank Corp. for $3.6 billion.

The development indicates a dramatic shift in Santander's geographical expansion targets. Having previously concentrated on Spanish speaking regions, Iberia and Latin America, Santander has indicated a desire to further establish itself in the so-called 'Anglo-Saxon' regions of the northern hemisphere.

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