Shares of Banco Santander closed Friday's session in Madrid with a 1.85% gain, finishing at €10.66. The advance comes as the banking group executes significant capital moves, including a major share repurchase and a sizable U.S. acquisition, which are expected to influence its stock trajectory in the coming week.
Capital Deployment Strategy
The bank has initiated a share buyback program valued at approximately €5.03 billion, with an expected completion date around July 21. Of this total, €1.83 billion is allocated from second-half 2025 underlying profit, while €3.2 billion is linked to CET1 capital following the sale of a stake in Santander Bank Polska. The board is scheduled to review the final 2025 cash dividend proposal on February 24.
Concurrently, Santander has agreed to acquire U.S.-based Webster Financial for $12.2 billion. The transaction, anticipated to close in the second half of 2026, aims to generate roughly $800 million in cost synergies and position Santander among the top ten U.S. retail and commercial banks by assets. Executive Chair Ana Botín stated the move is designed to strengthen scale, profitability, and lower funding costs in the U.S. market.
Risks and Provisions
The Webster deal has revived concerns among some analysts regarding execution risk and potential share dilution, with the transaction structure implying a capital increase near €3.5 billion. Meanwhile, the bank's UK subsidiary has raised its provision for motor finance redress to £461 million in response to regulatory uncertainty from a Financial Conduct Authority consultation. Santander UK noted "significant uncertainty" regarding the outcome, and related customer complaints have been paused until May 2026.
The bank's recent performance provides a backdrop for these strategic decisions. Santander reported a 12% increase in 2025 attributable profit to €14.1 billion, with customer growth of eight million to 180 million total. Investors will now focus on the upcoming Investor Day on February 25 and the first-quarter earnings call on April 29 for further details on capital planning and the integration of its U.S. expansion.