Sovereign making Hub its home base
Retail bank’s move could help region
Sovereign Bank is formally moving its headquarters to Boston, the bank confirmed yesterday, making it the largest retail bank based in Massachusetts and ending a long streak of corporate headquarters leaving the region.
The move by Sovereign, based in Pennsylvania, will not have an immediate impact on Sovereign’s employment in Massachusetts, but will make Boston the headquarters of a major regional bank for the first time since FleetBoston was gobbled up by Bank of America Corp. in 2004. It could also position Boston to gain jobs as the company grows.
Sovereign, a unit of Spanish banking giant Banco Santander S.A. of Madrid, operates in the Northeast and Middle Atlantic regions and has about 8,500 employees, including nearly 2,700 in Massachusetts.
“The Boston area is a strong hub for the financial services industry and is made stronger by Sovereign making this its home,’’ Governor Deval Patrick said yesterday in a statement. “We look forward to further strengthening the business climate and supporting the talented workforce that attracts the leading financial firms to do business here.’’
The move is the latest in a series of steps by Santander to reorganize Sovereign since taking over the once-troubled bank two years ago during the financial crisis. Santander has poured money into the bank, revamped its operations, reduced its portfolio of troubled loans, and focused its operations on its core territory on the East Coast.
In May, Santander filed an application with regulators to convert its corporate charter from a thrift to a national bank, which would allow it to make more commercial loans and expand its US business. A Sovereign spokesman confirmed the headquarters move yesterday, but declined to comment further.
Sovereign becomes the largest retail bank based in Boston with nearly $77 billion in assets and 723 branches in nine states. Eastern Bank, a Massachusetts community bank with 95 branches and nearly $8 billion in assets, one-10th the size of Sovereign, has been the largest locally based bank since Bank of America took over FleetBoston.
As measured by deposits and branches, Sovereign is the third-largest retail bank operating in the state behind Bank of America, based in Charlotte, N.C., and Citizens Financial Group of Providence. Sovereign entered the New England market in 2000 after it acquired 278 surplus branches FleetBoston had to divest to meet federal antitrust laws following the 1999 merger of Fleet Financial Group and BankBoston Corp.
Relocating the headquarters essentially confirms the status quo: Sovereign’s top executives have been working from Boston in recent years, instead of the bank’s historic headquarters in Wyomissing, Pa., a town 60 miles northwest of Philadelphia.
The company’s top executives have been in Boston since longtime Massachusetts executive Joseph P. Campanelli became Sovereign’s chief executive in 2006. Campanelli resigned two years later as Sovereign struggled during the financial crisis. Santander took over the bank in 2009, but has continued to keep Boston’s top executives in the city. Jorge Morán, who was appointed to lead Sovereign Bank late last year, works out of Sovereign’s offices at 75 State St.
Local business leaders said having corporate headquarters is important because it tends to lead to more investment in the community, both in terms of jobs and charitable contributions.
“I think it’s great news,’’ said Paul Guzzi, chief executive of the Greater Boston Chamber of Commerce. “Having a corporate headquarters in a community is always plus.’’
In addition to Massachusetts, Sovereign operates in Connecticut, Delaware, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island. Santander, recently reported Sovereign earned $183 million in the second quarter, up 39 percent from 2010.
Eastern Bank, meanwhile, can still lay claim to being the largest independently owned bank based in Boston, since Sovereign is a unit of a Spanish bank.
“Truth be told, Boston will be the North American field office for Santander,’’ said Eastern Bank spokesman Joe Bartolotta. “Does anyone think any major decisions will be made in Boston?’’
Still, Bartolotta noted that companies have historically given more money to cities where they are based. “If it increases their charitable giving to this region, that is a good thing,’’ he said.
Todd Wallack can be reached at firstname.lastname@example.org.