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Santander planning high-yield online deposit strategy in US


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According to Market Intelligence, April 2023

Santander planning high-yield online deposit strategy in US

Banco Santander SA is set to launch an online deposit offering in the U.S., Santander Holdings USA Inc. President and CEO Scott Powell told The Financial Times in an interview.

Santander plans to launch the platform within the next year to get cheaper funding for its consumer lending business, Powell said. He said the platform will be an online portal with money market accounts offering higher rates than competitors.

The Spanish banking giant is also planning to bring Open Bank, its full-service digital bank, to the U.S. farther in the future, according to the report.

Santander is among the largest banks in the U.S., with total assets of $143.91 billion as of June 30, based on S&P Global Market Intelligence data.

Santander's product would compete with other high-yield online savings offerings in the U.S. market, such as Goldman Sachs Group Inc.'s Marcus. Its current savings rate is 1.90%, with the investment banking giant lowering the rate three times in 2019. The moves have come as the Federal Reserve cut the federal funds rate range by 50 basis points this year, and markets are widely pricing in another cut.

Digital banks in 2018 outpaced the largest U.S. banks in terms of growing their deposits.