- Key insight: Banco Santander finalized its acquisition of Webster Financial on Thursday, marking the closure of the largest U.S. bank M&A deal to be announced this year.
- What’s at stake: Santander is positioned to significantly increase its scale and profitability in the U.S., where it has been trying for years to be a larger retail and commercial bank.
- Forward look: Santander has set a goal to achieve a return on tangible equity of around 18% by 2028, which would be a large improvement from last year, when the metric was 10%.
UPDATE: This article includes new comments from Santander U.S. CEO Christiana Riley.
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Following the completion of Banco Santander’s acquisition of Webster Financial, the head of Santander’s U.S. operations said the bank is planning to take the integration process slowly.
The Spanish banking giant, which officially acquired Stamford, Connecticut-based Webster on Thursday, wants to avoid customer disruptions, according to Christiana Riley. A core systems conversion will likely take place by the end of 2027, but no changes are expected to be made within the next 12 months, which means brands and systems will remain unchanged for now, Riley said.
“We’re not going to do anything that’s premature or not appropriately planned out,” Riley told American Banker on Thursday. “We can’t confuse our customers as to who can serve them until we can serve them across a single platform.”
Banco Santander’s acquisition of Webster wrapped up the largest U.S. bank merger or acquisition announced so far this year. The deal, which was valued at $12.3 billion when it was announced in February, supports Santander’s ongoing efforts to improve the scale and profitability of its stateside business.
The acquisition was finalized six-and-a-half months after the two parties said they would partner to create a $327 billion-asset bank with a branch network stretching from Pennsylvania to New Hampshire. Webster had long been on Banco Santander’s wish list as a way to expand its scale in the U.S., where Santander has been trying for several years to become a larger retail and commercial bank.
The acquisition will help Santander achieve its return on tangible equity target in the U.S. of “around 18%” by 2028, Santander said Thursday. That would be up considerably from 2025, when the bank reported a 10% return on tangible equity.
In a press release Thursday, Riley called the completion of the transaction “a pivotal moment in Santander’s long journey in the United States” and one that “underscores our confidence in the strength and opportunity in the U.S. market.”
Santander expects to reduce costs by $800 million by the end of 2028. The reduction will occur primarily through the integration of technology platforms and “de-duplication” of back-office jobs, such as those in accounting and risk management, Riley told American Banker.
The combined workforce will be around 14,000 people, she said.
Santander’s branch count is now more than 550, including about 195 former Webster branches, the majority of which are located in Connecticut and New York.
Branch closures are “not a meaningful part” of the expense reductions, Riley said. While there will continue to be some tweaks to the network to address underperforming branches, there isn’t a lot of physical overlap of Santander and Webster branches, she said.
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The tie-up between Madrid-based Santander and Webster tops the list of bank M&A deals announced since the start of the year. Bank M&A was poised to accelerate in 2026 following a large pickup in activity in the back half of 2025, but the number of deal announcements slowed following the start of the U.S.-Iran war in late February. Analysts expect activity to pick up in the second half of the year, given the relative strength of bank stock prices and the favorable regulatory environment.
At certain points over the past six months, analysts wondered if Santander’s bid to buy Webster could be in jeopardy, in light of President Trump’s threats in March to halt trade with Spain. The Spanish government had refused to allow the U.S. military to use its bases to launch attacks against Iran. Last month, Trump made similar comments, but trade between the two NATO allies continues.
The Federal Reserve Board approved the deal earlier this month, following approvals from the Office of the Comptroller of the Currency and the European Central Bank. Webster shareholders approved the transaction in May, according to a securities filing.
Santander is an outlier among European banks, most of which have retreated from the states in recent years due to stiff competition from U.S.-based banks.
Following the Webster acquisition, Riley remains Santander’s U.S. country head, a role she has held since early 2025. John Ciulla, Webster’s chairman and CEO, is now CEO of Santander Bank, N.A., while Luis Massiani, who was Webster’s president and chief operating officer, is now the COO of Santander Holdings USA and Santander Bank, N.A. Massiani will also lead the integration of the two banks.
Webster’s former headquarters in Stamford will become a corporate hub for Santander U.S.’s commercial and retail banking operations, Riley said. In addition to Santander’s U.S. headquarters in Boston, which also serves as a hub for commercial and retail operations, the bank has corporate hubs in New York, Miami and Dallas.
The New York hub focuses on corporate and investment banking, the Miami hub focuses on private banking, and the Dallas hub is the primary location for the bank’s consumer-finance business, which includes its large auto-lending arm.
Santander’s integration timeline is lengthy in comparison with most other recent bank mergers. The bank is leaning heavily on the experience of Webster, which integrated a 2022 acquisition, Sterling Bancorp, at a deliberate pace, she said. Webster acquired Pearl River, New York-based Sterling in early 2022 and set a 12- to 18-month integration timeline.
“We’ve bought a wonderful bank that we’re very excited about, and we’re working our way through the right way to do this for customers,” Riley said. “We want to take our time to plan and prepare for a well-managed technology transition.”
For now, customers of both Santander and Webster will be able to use one another’s ATMs to access cash at no cost, Santander said in the release.
Webster was attractive to Santander because of its stable low-cost deposits from multiple sources, its dense branch network in Connecticut, where Santander had few branches, and its strong commercial loan portfolio, executives have said.
The combined bank has $185 billion in loans and $172 billion in deposits, based on balances as of Dec. 31, 2025, according to the release.
