- Key insight: The Fed's approval for the proposed $12.3 billion merger followed green lights by the European Central Bank and the Office of the Comptroller of the Currency.
- What's at stake: The acquisition will give Santander what its group executive chair, Ana Botín, has called the "final step change" it needs for U.S. growth.
- Forward look: Santander executives have said they expect the deal to close in the second half of 2026.
Processing Content
Banco Santander received the Federal Reserve Board's approval Tuesday to buy Webster Financial, marking a significant win in the Spanish banking giant's stateside expansion efforts.
The Fed's approval eliminates the last regulatory hurdle the proposed $12.3 billion merger had faced. It arrived two weeks after the European Central Bank signed off on the deal. The Office of the Comptroller of the Currency gave the green light in mid-June.
The U.S. central bank's approval positions Santander to become the nation's 19th-largest bank, with assets of $253.6 billion, according to the Fed. The tie-up is the largest U.S. bank merger or acquisition to be announced so far this year.
The expected closing date was not immediately known Tuesday afternoon. But Santander executives have repeatedly said they anticipate the transaction will be completed during the second half of the year.
The Santander-Webster merger is a crucial part of Santander's strategy to expand in the United States. The Madrid-based bank has had a stateside presence since 2006, when it acquired a 20% stake in Sovereign Bank. It acquired the rest of Philadelphia-based Sovereign in 2009 and, four years later, renamed it Santander Bank, which at the time operated in nine Northeastern states.
Santander Group Executive Chair Ana Botín has recently characterized the addition of Stamford, Connecticut-based Webster, a Northeast regional bank with roughly $86 billion in assets, as "a final step change" for U.S. growth after years of trying to gain scale and profitability.
The deal will help Santander diversify its U.S. loan portfolio. That bank's loan book, which has historically been dominated by consumer-finance loans, will gain more commercial-and-industrial and commercial real estate loans.
Meanwhile, Santander's U.S. deposit base will benefit from a stable source of low-cost deposits from a variety of sources, including Webster's consumer bank, its commercial bank and its health savings accounts business, Santander executives have said.
Webster has about 195 branches in Connecticut, New York, Massachusetts and Rhode Island.
Read more:
In April, the two banks announced leaders of specific business lines, which will be overseen by a mix of current Santander U.S. executives and existing Webster leaders. Two high-ranking Santander executives will depart: Swati Bhatia, head of Openbank and Santander U.S.'s retail bank since 2024, and Michael Lee, who has been head of Santander U.S. commercial banking.
Webster shareholders approved the deal in May, according to a securities filing.
U.S. regulators have been supportive of bank mergers during the second Trump administration, but some observers raised questions about the prospects of the Santander-Webster deal after President Trump threatened to cut off trade with Spain earlier this year.
Those threats followed Spain's decision not to allow the United States to use its airfields to launch attacks on Iran. Nonetheless, trade between the U.S. and Spain has continued without interruption since the start of the Iran war.
During its review, the Fed received two negative comments from one person who expressed concerns about potential branch closures and reduced access to lending, according to the Fed's approval notification. Santander has not outlined potential branch closures that may take place.
