MADRID, Feb 4 (Reuters) - Santander shares fell as much as 5% on Wednesday after the announcement of its proposed $12.2 billion acquisition of Webster Financial and the flagging of short-term execution risks by analysts who otherwise welcomed the deal's strategic rationale.
The Spanish bank's Chairman Ana Botin, who has stuck to the bank's U.S. presence despite years of lower profitability there than at group level, told analysts that to become a global player you have to be present in the United
States.
Barclays said that the Webster acquisition would help to accelerate Santander's U.S. return-on-tangible-equity ratio (ROTE), a measure of profitability, to about 18% by 2028 from 10.8% currently.
The broker also said that investor concerns centred on the perceived shift from previous messaging that favoured organic growth and buybacks over U.S. dealmaking, something Botin tried to dispel by saying there will be no more bolt-on acquisitions over the next three years.
Santander shares were down 3.7% by 0958 GMT, having lost 125% last year.
"Execution risk remains, particularly around the delivery of the ambitious cost synergies and the sequencing of integration," Barclays said in a note, though it added that Webster was a complementary, high-quality franchise that improves deposit quality and diversifies revenue.
Santander said it expects the deal to deliver cost savings of about $800 million by the end of 2028, equivalent to roughly 19% of the combined cost base.
(Reporting by Jesús AguadoAdditional reporting by Emma PinedoEditing by David Goodman)
