By Jonathan Stempel
NEW YORK, Nov 7 (Reuters) - Sovereign Bancorp Inc (SOV.N: Quote, Profile, Research, Stock Buzz), the second-largest U.S. savings and loan, will spend the next year replenishing capital and improving day-to-day operations to boost profit and rebuild investor confidence after its stock fell by half, its chief executive said on Wednesday.
"If you look at what we've done in a very difficult year, we've raised reserves, we've raised our capital levels, we continue to build back to where we should be," Chief Executive Joseph Campanelli said at the Reuters Finance Summit. "Within the next 12 months, we're in a position to have more capital to have options for share repurchases and things like that."
Campanelli has led Philadelphia-based Sovereign since the October 2006 ouster of predecessor Jay Sidhu, but continues to live in Wellesley, Massachusetts, near Boston. He had previously led the company's New England operations.
Sovereign has $86.6 billion of assets and 750 branches in eight northeast U.S. states,
Critics had faulted Sidhu for growing too fast, spending too much, overpaying directors, lacking focus and being a drag on Sovereign's share price.
Since he left, Sovereign has emphasized clean-up, including a balance sheet restructuring and write-downs for home equity and auto loans.
Yet the shares continue to fall, dropping below $12 each on Wednesday for the first time since Oct. 2002.
The decline mirrors a slide at larger thrift Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz), as investors fret that rising loan losses will depress results at banks and thrifts nationwide. Continued...
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