Sovereign Bancorp, the second largest US savings and loans institution, is poised to raise $1bn to $2bn (£511m to £1bn) in fresh capital from a group of investors led by Grupo Santander of Spain. Financial Times

The deal, which could be announced as early as next week, would make Philadelphia-based Sovereign the latest in a growing line of struggling US banks seeking to raise capital to offset growing losses on mortgages, home equity, motor and other types of consumer loans.

Much of the capital has come from foreign groups and sovereign wealth funds as well as from private equity firms.