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UK to run Citizens Bank owner; Santander close to Sovereign deal

Banco Santander Central Hispano SA, the giant Spanish bank that's so far avoided credit crisis problems, is in talks to buy the 75 percent of Sovereign Bancorp it doesn't already own. Meanwhile, the British government is close to buying a controlling stake in Royal Bank of Scotland, owner of Citizens Bank of Pennsylvania

    by Joseph N. DiStefano
    Published 

More bank turmoil and consolidation, involving two names familiar in Philadelphia:

Sovereign Bank -- Banco Santander Central Hispano SA, the giant Spanish bank that's so far avoided credit crisis problems, is in talks to buy the 75 percent of Sovereign Bancorp it doesn't already own, according to financial news reports in Europe and New York. Sovereign is nominally based in Philadelphia, but actually run from offices in Boston and in Reading, Pa. The company, one of the Philadelphia area's biggest home lenders, faces big investment losses from Fannie Mae bonds, and a slowdown throughout its markets.

Citizens Bank -- Meanwhile, the British government is close to buying a controlling stake in Royal Bank of Scotland, owner of Citizens Bank of Pennsylvania, which is roughly the second-largest bank in the Philadelphia area after Wachovia Corp. Citizens is the major lender to Philadelphia Media Holdings, owner of the Inquirer and Philly.com. Royal Bank has been vulnerable since it spent too much to buy Dutch investment bank ABN Amro near the height of the investment market bubble two years ago. The Brits hope it's a temporary investment; Citizens BANK PARK... isn't likely to become Royal Exchequer Park anytome soon.

Guardian (UK) article on Santander and Sovereign (cut and paste this url:)

http://www.guardian.co.uk/business/feedarticle/7859694

Bloomberg article on Royal Bank bailout:

http://www.bloomberg.com/apps/news?pid=20601110&sid=akXHSO.zwyK4

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