Connecticut-based Webster Financial Corp. WBS is set to open 14 banking centers in mid-January in the greater Boston area. The company’s banking unit – Webster Bank, N.A – is acquiring the leasehold interests in the 14 locations currently held by Citibank, the subsidiary of Citigroup Inc. C
The major move comes in line with Webster’s efforts to boost its presence in Boston. Financial terms of the deal remained undisclosed. Notably, the company will open the centers under the Webster brand. The transaction does not include deposit or loan accounts from Citibank. Essentially, this means that Webster will have to compete with other banks in the market to attract customers. Webster expects the transaction to be moderately dilutive to earnings per share in 2016, breakeven in 2017 and be accretive following this.
Chairman and CEO of Webster mentioned, “Since we opened our hugely successful Boston flagship at 100 Franklin Street six years ago, we have been looking for ways to expand our Boston presence and serve Boston in a meaningful way. With these 14 locations, we instantly achieve critical mass, including several premier high traffic locations, which allows us to expand the market for our unique customer service that we have always been known for. Boston has potential to be a billion dollar deposit market for Webster.”
The 14 centers are located in some of the most popular regions of Boston including Downtown Crossing, Government Center and Copley Square. Currently, with over $24 billion in assets, Webster is engaged in providing consumer banking, mortgage, financial planning, trust, and investment services through its 163 banking centers, including the Boston flagship and 16 offices in southeastern Massachusetts.
For Citigroup, which unveiled its plans to exit the Boston retail banking market in September this year, the move is part of its strategy to remodel its U.S. branches with greater focus on technology while simultaneously reducing the number of branch locations.
Webster currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the north-east banks space include Blue Hills Bancorp, Inc. BHBK and Beneficial Bancorp, Inc. BNCL, each sporting a Zacks Rank #1(Strong Buy).
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