Banco Santander to finalize Webster Financial acquisition

Banco Santander is set to finalize its acquisition of the U.S.-based Webster Financial on August 20, following approvals from the Federal Reserve, the European Central Bank, and shareholders. This move is intended to strengthen Santander’s presence in the United States and accelerate its financial objectives. Once integrated, the bank expects the U.S. market to reach a tangible return on equity (ROTE) of approximately 18% by 2028, with an estimated 7% to 8% increase in earnings per share.

This acquisition, alongside the recent purchase of TSB in the United Kingdom, forms part of a broader strategic plan to utilize deposits as a primary tool for driving profitability. Analysts from Citi note that the expansion of Openbank in the U.S. and Mexico, combined with the Webster and TSB acquisitions, allows the group to build a broader, more diversified, and lower-cost deposit base. By managing these deposits efficiently, Santander aims to reduce wholesale funding costs and improve interest margins.