The United States Federal Reserve (Fed) has given the final green light to the purchase of Webster Financial by Banco Santander, clearing the way for the deal, valued at 12.2 billion dollars (about 10.3 billion euros), to likely close on August 20.
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The authorization comes after the acquisition received the backing of Webster shareholders at the end of May, the approval of the Office of the Comptroller of the Currency (OCC) on June 12, and the approval of the European Central Bank on July 21.
Announced last February, the purchase of Webster constitutes the largest corporate operation carried out by Santander in the United States and one of the most important since Ana Botín assumed the presidency of the group. The Spanish entity thus incorporates a regional bank based in Stamford (Connecticut), specialized in retail and commercial banking and with a strong presence in the northeast of the country.
The operation goes far beyond a simple acquisition of size. Webster provides the Spanish bank with a broad base of deposits from individuals and companies, one of the most coveted assets by the banking sector after the Silicon Valley Bank crisis, which will allow Santander to strengthen the financing of its business in the United States, where it already operates through Santander Bank, Openbank, and its auto financing division.
It is one of the most important corporate operations since Ana Botín assumed the presidency of the group
“Santander US and Webster fit perfectly,” said the group’s president, Ana Botín, on Wednesday in a statement. She highlights that the combination of both entities, supported by global platforms, technology, and the experience of the Spanish bank, will create “a stronger bank with the necessary scale to offer better service to our customers and the communities in which we operate.” In her view, the integration will strengthen the group’s position “in one of the most attractive banking markets in the world” and place it “in a privileged position to build one of the best-performing banks among its competitors in the United States.”
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Santander expects the purchase to accelerate the achievement of the objectives of its new strategic plan. Once the integration is completed, the bank anticipates that its business in the United States will reach a return on tangible equity (RoTE) close to 18% in 2028, as well as increase the group’s earnings per share by between 7% and 8% and achieve a return on investment close to 15%.
When the operation closes, most of Webster’s businesses will be integrated into Santander Bank N.A., although until then both entities will continue to operate independently and customers will keep their accounts, products, and services unchanged.
What is Santander buying?
Webster Financial is the parent company of Webster Bank, a regional bank based in Stamford (Connecticut) and one of the entities with the greatest presence in the northeast of the United States. Founded in 1935, it specializes in commercial and retail banking, business financing, wealth management, and financial services for the healthcare sector, one of its main business niches. Its greatest asset is a broad and stable deposit base, considered especially valuable since the Silicon Valley Bank crisis, as it allows financing loans with less dependence on the markets. With nearly 200 billion dollars in assets, Webster operates mainly in Connecticut, Massachusetts, Rhode Island, New York, and Pennsylvania, one of the regions with the highest income and economic activity in the country.
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