Franklin Mutual Advisers Sends Letter to Sovereign Bancorp Board of Directors Objecting to Transactions with Grupo Santander and Independence Community Bank Corp.

Below is a copy of the letter sent to Sovereign's Board signed byFranklin Mutual Advisers CEO Peter A. Langerman and Chief InvestmentOfficer Michael Embler:

"November 3, 2005

Board of Directors
Sovereign Bancorp
1500 Market Street
Philadelphia, PA 19102

We are investment adviser to funds that currently own in excess of
17 million shares of Sovereign, representing a holding of nearly 5% of
the company's outstanding shares. We have owned a position in
Sovereign stock continuously since 2001.

We are writing to you to express our outrage over Sovereign's
recently announced transactions with Grupo Santander and Independence
Community Bank Corp. These transactions rank with the worst examples
of management and board entrenchment and disdain for shareholder
rights that we have witnessed in our history as public investors.
Despite desperate efforts to justify these actions, the timing and
structure of the transactions highlight the underlying motivation: an
attempt by the Board and management to insulate themselves from an
increasingly unhappy shareholder base and disenfranchise the true
owners. The effect is not only to entrench management but also to
destroy substantial shareholder value. With the Board's appalling
history of conflicts of interest as a backdrop, this latest salvo
confirms the self-interested mindset of the people who are supposed to
be fiduciaries to the shareholders.

The terms of the Santander transaction, viewed as a whole, provide
unreasonable and unjustifiably disparate rights and options to
Santander, thus running afoul of several NYSE rules and state
fiduciary law standards, and sound business judgment:

1. In the face of a recently announced proxy solicitation by
Relational Investors, the company has agreed to sell an
initial 19.8% stake to Santander, with generous gross-up
rights and a direct facilitation of an additional 5.1% open
market purchase by Santander, which would bring its total
ownership stake to 24.9%. These issuances far exceed the 16.6%
aggregate threshold permitted under the NYSE rules (19.9% as
diluted by the issuance of the new shares as specified under
the letter of the rule). Moreover, the voting agreements and
other excessively favorable rights granted to Santander under
the Investment Agreement amount to a clear "change of control"
within the meaning of a separate NYSE shareholder approval
requirement, thus requiring that at a minimum the transaction
be put to a shareholder vote. We understand that Santander
intends to account for this on an equity basis, indicating
their view of the investment as a greater than 20% stake in
Sovereign.

2. Equally as offensive are the efforts by the current Board and
management to entrench themselves and disenfranchise the
current shareholder base. To guarantee a perpetuation of the
current Board, Santander will vote its full ownership stake in
favor of all directors proposed by the current Board and
against any person nominated by any other person. Since
management and the Board control approximately 8% of the
company's shares, this brings Santander and management's
combined voting control to 33%, a clear controlling stake.

3. Even more egregious is the provision granting Santander a veto
right over the firing of the CEO, knowing that there is
significant existing shareholder disenchantment with the CEO.
What could be more fundamental to the role of the Board and
the shareholders in their entirety than the ability to
determine who will manage this company? How can a Board
respond to a known shareholder concern with management by
abandoning its ability to change the top manager?

4. The no shop, no talk and no response provisions of the
agreement are unprecedented and simply cannot stand as a
matter of sound corporate governance or sound business
judgment. The various options granted to Santander to acquire
100% of Sovereign on terms and at a time largely of its
choosing over the next 5 plus years, with very limited
opportunity for a bona fide competitive process, are equally
oppressive. The anti-takeover provisions in these agreements
are also among the worst we have ever seen.

5. The result is that you have sold control of the company to
Santander for what amounts to a thin premium, if any, off of a
depressed current share price. You then justify overpaying for
Independence based on the receipt of this illusory premium.
How can one seriously suggest, as Mr. Sidhu attempted to do on
page 8 of his presentation at the November 2nd Ryan Beck
conference, that the cost of the Independence deal was only
$36.56, since $5.44 of the premium came from the so-called
Santander premium?

6. The company will not even commit to holding its annual
shareholder meeting at the regularly scheduled time,
suggesting an attempt to dilute existing shareholder support
for the ongoing proxy fight through the addition of a 20% plus
shareholder who is practically and contractually bound to
support the company's Board nominations.

7. Finally, the sale does not contain a general fiduciary out;
you as directors are inappropriately inhibited from fulfilling
your legal obligations.

These terms, viewed as a whole, show that the parties have
substantially over-reached by agreeing to provisions that are far more
elaborate and takeover protective than any transaction precedent of
which we are aware. Why are you so afraid to put the transaction to a
shareholder vote, as First Fidelity did in 1991, when it agreed to a
much more modest investment agreement with Santander? And if the
Independence deal is such a compelling one, it should stand on its own
merits and need not be subsidized by the sale of control to Santander.

Unfortunately, shareholders know the answers to these questions.
The proposed acquisition of Independence Community Bank is driven more
by empire-building and entrenchment than creating shareholder value.
Sovereign has agreed to pay a significant premium for what we and
others believe is a mediocre franchise (and at best worth several
dollars less per share than the price you have offered, which
management itself seems to admit). Sovereign's use of unjustifiably
aggressive estimates of income growth in the pro forma earnings
assumptions used to justify the acquisition is highly dubious. And
even with the sale of equity to Santander, Sovereign's balance sheet
will deteriorate. As a result, the ability to engage in share
buybacks, which we view as a better use of capital, will be seriously
impaired. Your empire building goals appear to go on forever, since
you have conditioned any acquisition of the company by Santander on
extreme long-term commitments to maintaining a 10-year ongoing role
(and presumably ongoing fees) for incumbent directors.

The management and Board of Sovereign have consistently tried to
wrap themselves in the cloak of creating shareholder value, while at
best paying lip service to serving the interests of the company's
owners. CEO Sidhu himself personified this cavalier attitude at the
October 25 lunch presentation to investors. As reported that day by
Dow Jones news service: "Sidhu fielded multiple questions about what
would happen if Sovereign received an outside bid for the
company...Sidhu shot down that notion: 'We would not respond if we
receive an offer,' he said at one point." Despite more recent, and
apparently better coached, attempts by Mr. Sidhu to soften his stance
on consideration of other bids, we have grave concerns about the
loyalty of any CEO and the competency of any Board willing to
countenance such a clear breach of their fiduciary duties to
shareholders.

The reaction of the public investment community to these
transactions clearly demonstrates that we are not alone in our views.
We call upon the Board to acknowledge and accept its responsibility to
manage Sovereign for the benefit of its shareholder owners, not for
the benefit of management or individual Board members, and to put the
transactions to a vote as you are required to do by law, by the NYSE
rules and by conscience. This Board has become the model of poor,
autocratic corporate governance, and this will be your legacy if
change is not forthcoming. These actions as you have presently put
them forward will not stand. We are currently evaluating all of our
options as we call on you to consider yours.

Sincerely,


/S/ Peter A. Langerman
Chief Executive Officer


/S/ Michael Embler
Chief Investment Officer"

Franklin Mutual Advisers, LLC, is a subsidiary of FranklinResources, Inc. (NYSE:BEN), a global investment managementorganization operating as Franklin Templeton Investments. FranklinTempleton Investments provides global and domestic investmentmanagement solutions managed by its Franklin, Templeton, Mutual Seriesand Fiduciary Trust investment teams. The San Mateo, CA-based companyhas more than 50 years of investment experience and over $453 billionin assets under management as of September 30, 2005. For moreinformation, please call 1-800/DIAL BEN(R) or visitfranklintempleton.com.