MADRID – Less than a month after taking over the top job at Philadelphia-based Sovereign Bancorp Inc. (NYSE: SOV), Paul A. Perrault apparently is on his way out.
Shareholders of Banco Santander SA – the Spanish bank that is in the process of acquiring Sovereign – were told yesterday that Colombia native Gabriel Jaramillo, 58, a member of the Sovereign board of directors, will be named the U.S. bank’s chairman and CEO when the transaction is completed tomorrow.
The news came as Santander shareholders voted to approve the purchase of the remaining 75.6-percent stake in Sovereign that Santander does not already own.
Sovereign shareholders are expected to approve the sale tomorrow.
Perrault – a Central Falls native (READ MORE) – was tapped in September to become Sovereign’s president and CEO, replacing the beleaguered Joseph P. Campanelli. (READ MORE) But he didn’t actually take over the bank until Jan. 5.
It was not immediately clear whether Perrault might be asked to stay on in some other capacity.
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Santander’s agreement to purchase the rest of Sovereign came in October, just weeks after Perrault was named to succeed Campanelli. (READ MORE) Initially, his position was considered to be safe, since Santander executives had endorsed his hiring.
But a major overhaul of Sovereign Bancorp – the parent of Sovereign Bank, which is the No. 3 commercial bank in Rhode Island in terms of deposits – was outlined yesterday by Santander Chairman Emilio Botín.
“The first thing will be to strengthen its balance sheet and adjust its risk profile to Banco Santander’s standards,” Botín said in a statement to the Santander shareholders.
“We intend to implement a plan to reduce Sovereign’s risk-weighted assets by $10 billion, which will basically affect the financial side of the portfolio, in order to focus on customer business. Moreover, we will realize an up-front writeoff of $2 billion.
“Our goal is to improve Sovereign’s management ratios, implementing Santander’s business model, introducing our technology and taking advantage of the group’s economies of scale,” Botín continued. “The target is to achieve $215 million in cost synergies by the end of the integration.”
Regarding the U.S economy, Botín said: “Our estimates are based on a significant contraction in the United States in 2009. However, we are confident that the traditional flexibility and ability of the U.S economy to adjust – together with the exceptional financial, monetary and fiscal measures that are being taken – will enable the United States to be among the first economies to emerge from the current crisis.”
According to the Sovereign Bank Web site, Jaramillo joined Grupo Santander – Banco Santander’s parent company – in 1996. He has served as advisor to Santander’s chairman since April 2008.
“I am convinced that Sovereign’s management team, led by Gabriel Jaramillo, will be able to successfully accomplish Grupo Santander’s goals,” Botín concluded.
Sovereign Bancorp Inc. (NYSE: SOV), the parent company of Sovereign Bank, is an $85 billion financial institution with 750 community banking offices, more than 2,300 ATMs and about 12,000 employees, mostly in the Northeast. For additional information, visit www.SovereignBank.com.
Grupo Santander(NYSE: STD), parent of Banco Santander SA, is an international banking group with total assets of more than 953 billion euros. It has nearly 133,200 employees at its headquarters in Madrid and 11,685 branches in continental Europe, the United Kingdom and Latin America. Additional information is available at www.santander.com.
