Federal Reserve clears Santander's acquisition of Webster Financial

Federal Reserve approval has removed the last major regulatory hurdle to Banco Santander's acquisition of Webster Financial, paving the way for the $12.3 billion transaction to close on Aug. 20. The Fed said Santander Holdings USA would become the 19th-largest U.S. bank with about $253.6 billion in assets after the deal, while Santander Bank would become the largest deposit holder in Connecticut with an estimated $42.3 billion and rank fourth in Massachusetts and Rhode Island and 11th in New York. Webster, an $86 billion-asset lender, is set to become a wholly-owned subsidiary of Santander, with most of its businesses folded into Santander Bank, N.A. and Webster CEO and Chairman John Ciulla due to lead the integrated bank as CEO. Santander has said the acquisition should strengthen its U.S. franchise, with projected return on tangible equity of around 18% by 2028 and expected earnings-per-share accretion of about 7% to 8%. The Justice Department told the Fed the deal would not significantly harm competition, though the central bank said it received four adverse comments. Santander and Webster said they will continue to operate separately until closing, with formal integration beginning afterward.