Santander falls 3% after Webster's acquisition

Shares of Banco Santander SAN.MC fall around 3.5%, among the worst performers on STOXX600 .STOXX, as the Spanish bank will buy U.S. regional lender Webster Financial WBS.N in a $12.2 billion deal failed to impress brokers

Morgan Stanley downgraded the Spanish bank to "equal-weight" from "overweight" as it believes Webster's acquisition is "unlikely to get the benefit of the doubt of a successful integration in the US"

The broker believes that $800 million cost synergies is ambitious and says that group's 20% ROTE target for 2028 exceeds MS' above consensus expectations

"With stock already at 1.8x TBV (Tangible Book Value) we see limited upside despite a strong Q4", it adds, noting that with the integration of TSB and Webster 2026 will be a transition year for Santander

Jefferies also sees as "tricky" to deliver on the simultaneous integrations of TSB and Webster, while overseeing One Transformation Program in the Rest of the Group

While the decision to allocate more capital to the US is unlikely to be taken easily by the market, the guided impacts of the deal and the valuation are not overly aggressive, the broker says

Separately the bank reported a rise of 12% in its 2025 net profit to a record 14.1 billion euros, above forecasts of 13.77 billion euros, and approved a 5.03 billion euro share buyback program

Share on track for its worst day since August

Including today's fall, the stock has gained 5.6% YTD​