The news: Banco Santander has agreed to acquire Webster Financial for about $12.2 billion, which will create a top-10 US bank with about $325 billion in assets. The combined bank will significantly grow Santander’s US physical footprint.

Zoom out: Santander has been scaling its presence recently. It launched Openbank, its digital-only banking arm, in the US in 2024 and gained more than 100,000 customers in its first six months. Openbank has since opened its first physical branch and expanded eligibility from residents of certain states to all legal US residents.

Lighter scrutiny of bank mergers under the Trump administration opened the door for some big transactions in 2025. The largest closed within the past month:

• Fifth Third and Comerica’s $10.9 billion merger creates the ninth-largest US bank, with about $288 billion in assets.
• Huntington Bank and Cadence Bank’s $7.4 billion transaction also creates a top-10 US bank with $276 billion in assets—though it will not be in the top 10 for long.
• PNC and FirstBank’s $4.1 billion transaction grows PNC’s assets by $26.9 billion to reach $575 billion.

There has also been a flurry of other smaller deals, including the just-announced $575 million merger of Columbia Financial and Northfield Bancorp. And in January, OceanFirst Financial and Flushing Financial announced a $575 million transaction.

Implications for banks: Top banks are leapfrogging each other for scale as smaller institutions consolidate to survive. Gathering deposits at a greater scale and lending to a wider audience is attractive—as is the operating leverage when technological infrastructure and development resources serve one organization instead of two. The merger trend will continue as long as the regulatory environment is favorable: FIs have no choice but to either become more efficient or pool their resources.