Sovereign Bank cuts 1,000 jobs

NEW YORK (Reuters) - Sovereign Bancorp Inc SOV.N, a Northeast U.S. bank set to be bought next year by largest shareholder Santander (SAN.MC), on Friday said it is cutting about 1,000 jobs to trim costs.

Sovereign joins a slew of other financial institutions in announcing job cuts amid the worst credit crisis since the Great Depression.

Kirk Walters, chief financial officer and acting chief executive, said in a statement that the cuts are the result of a review of Sovereign's projected 2009 budget.

The job reductions will begin this quarter and continue next year, the bank said.

Financial companies have announced more than 250,000 job cuts this year, according to outplacement firm Challenger, Gray & Christmas Inc. Bank of America Corp (BAC.N) last week said it plans to eliminate 30,000 to 35,000 jobs over three years, as it prepares for slowing business activity and its purchase of Merrill Lynch & Co Inc MER.N.

Sovereign, which has most of its business in the Northeast United States, has seen credit losses rise as a result of the subprime crisis. The company posted a loss of $1.48 per share for the third quarter in part due to increasing its allowance for credit losses.

The bank, based in Wyomissing, Pennsylvania, agreed in October to a $1.9 billion all-stock deal from Santander to buy the 75.65 percent piece it did not already own. The U.S. Federal Reserve approved the deal earlier this month.

Sovereign shares were up 4 cents at $2.88 on Friday on the New York Stock Exchange. The bank's shares have fallen 75 percent this year.

(Reporting by Elinor Comlay; editing by Jeffrey Benkoe and Gerald E. McCormick)