Sovereign Bancorp CEO to be forced out

10 October 2006

The chairman and chief executive of Sovereign Bancorp, Jay Sidhu, is expected to be forced out of this job by the bank's board this week, according to press reports today.

The Wall Street Journal said that sources close to the board had told it that Mr Sidhu would hand in his resignation by the end of the week, with current vice chairman Joseph Campanelli likely to be promoted to the top job of president and chief executive, while board member Michael Ehlerman is said to be in line for the job of chairman.

Mr Sidhu was credited with helping turn the Pennsylvania-based operation into one of the largest savings and loan companies in the US, although shareholders have voiced concerns recently that the bank is not performing as well as it could.

The leadership crisis comes as Spain's Banco Santander Central Hispano waits to takeover the bank, building on the 25 per cent stake it already owns.

Observers believe that the current problems could provide the perfect opportunity for the takeover, with the new management able to take advantage of the power vacuum that would inevitably be created.

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