Sovereign Bancorp

Sovereign Bancorp Inc. of Philadelphia said yesterday it was cutting 1,000 jobs, or 8 percent of its staff, to reduce costs. "There is never a good time to reduce staff, but this step is necessary, particularly during this economic environment," Kirk W. Walters, Sovereign's chief financial officer and acting chief executive, said in a statement. Sovereign is being taken over by Banco Santander SA of Spain for an estimated $1.9 billion in stock. The Spanish bank already is Sovereign's largest shareholder with a 24 percent stake.

Losses continued at Sovereign Bancorp during the third quarter as the company attempted to consolidate its recent push into New England. Sovereign, of Wyomissing, Pa., and Philadelphia, said Thursday that it lost $15.9 million on revenues of $259 million during the three months ended Sept. 30. The bank attributed the negative results to investment losses and to systems-integration costs and other merger expenses. Not counting those one-time expenses, Sovereign said it would have earned $74 million.

Sovereign Bancorp Inc. warned yesterday that the nationwide downturn in the credit and capital markets exacted a $1.6 billion toll on the company in the 2007 fourth quarter. About $800 million of the total charge the company will record was from the impairment of goodwill booked in the June 2006 purchase of Independence Community Bancorp in Brooklyn for $3.64 billion. Sovereign, whose corporate headquarters is in Philadelphia, though its chief executive is based in Boston, said difficult economic conditions resulted in disappointing revenue and deposit growth at Independence, the last of many acquisitions under former chief executive Jay S. Sidhu.

Sovereign Bancorp Inc. agreed yesterday to pay $980 million in cash and stock for Waypoint Financial Corp. for its second acquisition this year. But the deals haven't dampened speculation that the Philadelphia bank will eventually be sold. "It seems like they are not ready to sell for a few years," said Claire Percarpio, an analyst with Janney Montgomery Scott L.L.C. "In the meantime, if they bulk up, it will get them a better price down the road. " Sovereign was reported as recently as November to be a target of Citizens Financial Group, of Providence, R.I., the U.S. arm of Royal Bank of Scotland and parent of Citizens Bank of Pennsylvania.

Sovereign Bancorp's civil war continued yesterday as the company's board chairman countersued its chief executive officer in federal court in Philadelphia. Frederick Jaindl, the Allentown poultry farmer and bank investor who is Sovereign's biggest shareholder, charged Jay Sidhu, bank president and chief executive, and other top Sovereign officials with breaching their fiduciary duty, wasting company assets and violating federal securities and banking laws. Sidhu last month sued Jaindl and two other Sovereign directors in the same court, accusing them of violating securities laws and acting improperly in trying to sell the bank holding company, which runs 79 savings bank branches in Southeastern Pennsylvania and New Jersey.

Two banks whose business is about evenly divided between Philadelphia and Boston are making intramural bets over tomorrow's Super Bowl. "We can't lose," Sovereign Bancorp managing director Dick Ehst said. At Sovereign, the rematch is personal. In September 2003, when the Patriots beat the Eagles, Jim Lynch, head of Sovereign's Philadelphia-based Mid-Atlantic division, had to wash the SUV of John Hamill, then the head of Sovereign's New England arm. "I don't think Mr. Lynch put his best effort into it," bank spokesman Carl Brown said yesterday.

Philadelphia-based Sovereign Bancorp, which like many banks has been caught in the recent financial meltdown, was in "advanced talks" last night to sell itself to Banco Santander S.A. of Spain, which was already a part owner, according to published reports. A takeover of Sovereign, which had been the fourth-largest bank in the Philadelphia region with 82 branches, would mark another consolidation of the global financial system, although the immediate impact on Sovereign's operations and its customers was unclear.

Banco Santander Central Hispano S.A. of Spain agreed yesterday to buy Sovereign Bancorp Inc. in a $1.9 billion deal, making the Philadelphia-based bank the latest to be caught in the world's financial upheaval. The proposed stock swap is expected to strengthen Sovereign, which had losses of $1.4 billion in 2007 as it wrestled with problem auto and home-equity loans. The purchase price of $3.81 per Sovereign share matches the company's closing price Friday on the New York Stock Exchange.

If your credit is good, Sovereign Bancorp Inc. will finance your mortgage at 7 to 8 percent. But Sovereign itself is not considered such a good credit risk. The company, which is nominally based in Philadelphia but is run from offices outside Reading, had to pay more than 10 percent interest on the $700 million it borrowed two weeks ago to finance its New England expansion. A decade of mergers has made Sovereign the biggest bank still based in eastern Pennsylvania, with $25 billion in assets and 300 branches across New Jersey, eastern Pennsylvania and northern Delaware.

Sovereign Bancorp will buy Main Line Bank and its parent company, ML Bancorp, for $345 million in stock, both companies said last night. The move unites two of the Philadelphia area's biggest home lenders. Sovereign, of Reading, and Main Line, of Villanova, have been scrambling to add investment and small-business services in recent months. Consolidation of back-office operations is expected to threaten 150 Main Line jobs, but some of those workers may be transferred to posts at Sovereign offices, said Dennis Marlo, ML Bancorp chairman.

In the Region U.S. to speed power-line projects The Obama administration moved to speed up permitting and construction of seven proposed electric transmission lines in 12 states - including Pennsylvania and New Jersey - saying the projects would create 10,000 jobs and help modernize the nation's power grid. The projects, to provide 2,500 miles of new transmission lines, are intended to serve as pilots for streamlined federal permitting and improved cooperation among federal, state, and tribal governments.

During a meeting last week at the Firstrust Bank branch in Southampton, Bucks County, Terry D'Alessandro, head of retail banking since June, asked manager Susan Schneider whether she was concerned about any of the branch's sales goals for 2011. Schneider, a 25-year Firstrust employee and a vice president, had one: new checking accounts, which are a crucial source of deposits for banks because little, if any, interest is paid on them. "It's hard to move people from their checking account," said Schneider, referring to the challenge of motivating customers to switch.

Michael Wood has been named senior manager, corporate communications for PPL Corp., Allentown. He had been chief spokesman and manager of communications for Peco Energy Co. in Philadelphia. Fran F. Swartz has been appointed chief financial officer of the National Museum of American Jewish History in Philadelphia. She previously was a consultant with Philadelphia-based Resources Global Professionals. Beneficial Mutual Bancorp Inc., Philadelphia, has named Thomas D. Cestare chief financial officer and executive vice president.

Sovereign Bancorp Inc., whose sale to Banco Santander SA was completed in January, confirmed another round of layoffs yesterday. This time, 950 jobs will be cut in the eight East Coast states in which Sovereign operates. In December, the company announced that it was cutting 1,000 jobs. It now has 10,700 employees. Sovereign's more than 3,000 employees in Pennsylvania are receiving special treatment because of a shareholder lawsuit that opposed the Santander takeover. It gave Pennsylvania workers job protection until Jan. 31, 2010.

A Philadelphia judge gave preliminary approval yesterday to the settlement of a shareholder lawsuit attempting to block Banco Santander Central Hispano S.A.'s proposed takeover of Sovereign Bancorp Inc. The proposed settlement, presented to Judge Richard I. Bernstein, has a couple of unusual features, thanks to a Pennsylvania law that allows corporate boards to consider all constituencies, such as employees, when making decisions, not just shareholders....

Sovereign Bancorp Inc. of Philadelphia said yesterday it was cutting 1,000 jobs, or 8 percent of its staff, to reduce costs. "There is never a good time to reduce staff, but this step is necessary, particularly during this economic environment," Kirk W. Walters, Sovereign's chief financial officer and acting chief executive, said in a statement. Sovereign is being taken over by Banco Santander SA of Spain for an estimated $1.9 billion in stock. The Spanish bank already is Sovereign's largest shareholder with a 24 percent stake.

The Philadelphia region's banking landscape has been turned upside down. Three of the six biggest banks here are being taken over: Wachovia by Wells Fargo; Citizens Bank by the British government; and Sovereign by its biggest shareholder, Santander of Spain. A fourth, Commerce, was bought by TD Bank Financial Group, of Toronto, before financial chaos erupted and prompted the U.S. government to take the radical step of investing $125 billion in the country's nine largest banks.

Banco Santander Central Hispano S.A. of Spain agreed yesterday to buy Sovereign Bancorp Inc. in a $1.9 billion deal, making the Philadelphia-based bank the latest to be caught in the world's financial upheaval. The proposed stock swap is expected to strengthen Sovereign, which had losses of $1.4 billion in 2007 as it wrestled with problem auto and home-equity loans. The purchase price of $3.81 per Sovereign share matches the company's closing price Friday on the New York Stock Exchange.

Philadelphia-based Sovereign Bancorp, which like many banks has been caught in the recent financial meltdown, was in "advanced talks" last night to sell itself to Banco Santander S.A. of Spain, which was already a part owner, according to published reports. A takeover of Sovereign, which had been the fourth-largest bank in the Philadelphia region with 82 branches, would mark another consolidation of the global financial system, although the immediate impact on Sovereign's operations and its customers was unclear.

Sovereign Bancorp Inc. yesterday regained a quarter of the $4 billion in market value it lost Monday, as the bank replaced its chief executive officer and assured investors and depositors that it was in solid shape. Amid widespread gains by financial stocks and upgrade by analysts, Sovereign's shares surged $1.62, or 69.53 percent, to close yesterday at $3.95 on the New York Stock Exchange. The new CEO, veteran New England banker Paul A. Perrault, will take over Jan. 3, the bank said.