Spanish fly

24 October 2005 By Mike Verdin

A stake in Sovereign Bancorp might not be the bargain it appears. There are good reasons for Santander to hold fire. Minority investments are no longer as popular. And it will be supporting a board which is in part to blame for Sovereign s discount.

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Santander Central Hispano, the Spanish bank, is in talks to buy a stake in Sovereign Bancorp, the US bank, people close to the deal said.

Sovereign would use the cash to support a bid for New Yorkbased Independence Community Bank.

Sovereign, headquartered in Philadelphia, has expanded through takeovers into New England, Maryland and Massachusetts.

Senior Santander staff are meeting in London ahead of results on October 25 when they are expected to unveil plans for Abbey, the UK bank bought last year.

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