Sovereign Bancorp outlined an ambitious growth strategy Tuesday, saying it aims to boost per-share operating earnings by 15% a year and triple its stock price over the next five years.

Sovereign presented the plan in its annual report to shareholders, which was to be mailed today.

The Philadelphia-based parent of Sovereign Bank, which stretched itself financially last year to buy 281 Fleet and BankBoston branches in New England, said it expects them to help it meet its targets.

President and chief executive officer Jay S. Sidhu said the five-year plan would allow Sovereign to boost operating earnings to $2 per share in 2005. The company will work to revive investor enthusiasm and push its stock to between $24 and $30 a share, he said.

Mr. Sidhu did not return phone calls Tuesday. In a prepared statement he acknowledged that the company had taken financial risks to make the purchases in New England but said that he believes Sovereign is now positioned to grow.

Some Wall Street analysts, however, questioned the bank’s bullishness.

David Winton, an analyst at Keefe, Bruyette & Woods in New York, downplayed the projections.

“It’s so far away, and with current angst over where the economy might go. … I’m not going to put a lot of weight in a particular earnings estimate or a stock price five years out,” Mr. Winton said. “It would have more weight if they focused on this year and next year. Of the next five years, those are the most challenging.”

Mr. Sidhu did sound a note of caution in his statement, noting that the growth will not come all at once. “We do not envision straight-line growth in EPS or our stock price. It’s a longer-term target,” he said.

His plan calls for annual increases of 15% for fee revenue, 7% to 10% for deposits, and 8% to 10% for consumer and corporate loans. The company also aims to pay off about $1 billion of debt by the end of 2005.

Sovereign’s stock price has suffered since the Fleet and BankBoston acquisitions as investors questioned its ability to finance and integrate those purchases. It has traded at between $7.50 and $9 a share most of this year; on Tuesday it gained 0.74% to close at $8.53.

Last month the company raised $150 million through the sale of common stock and $175 million in a debt offering.


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