Leading Spanish bank Santander intends to leverage the current financial crisis to take control of the largest remaining American savings and loan bank, Sovereign Bancorp, which has recently suffered significant losses, American media reported on Monday.
Negotiations for the acquisition are still ongoing, reported the influential New York financial daily The Wall Street Journal on Monday, citing sources within the Spanish bank. According to that report, Santander plans to offer around 1.8 billion euros (2.5 billion dollars) for Sovereign Bancorp, in which it already holds a 25 percent stake. The Spanish bank purchased it three years ago when Sovereign’s shares were trading at 27 dollars. Today they are worth 3.80 dollars, meaning that the Spaniards have lost about two billion euros on that investment.
After the U.S. federal government took control of Washington Mutual in September, Sovereign became the largest American savings and loan bank. Its asset value is 79 billion dollars and it has 750 branches, mainly in the northeastern part of the U.S. Two weeks ago, Santander acquired assets related to savings deposits and the branch network of British mortgage bank Bradford & Bingley for 770 million euros. The Spaniards plan to merge the new acquisitions with their British subsidiaries Abbey and Alliance & Leicester.
