*

Launches Openbank in US to expand retail unit nationwide

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Could help lender fund as much as $30 bln of auto loan

assets

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Plans to evaluate how to grow Openbank further, including

deals

(Adds details in paragraphs 9, 10, 11 on the U.S. and products)

By Jesús Aguado and Saeed Azhar

MADRID/NEW YORK, Oct 21 (Reuters) - Spain's Santander

launched its digital bank in the United States on

Monday, which could help fund up to $30 billion in loans for

vehicle purchases and broaden its retail business in the

country, the bank's U.S. CEO Tim Wennes told Reuters.

The euro zone's third-biggest lender by market value is one

of the few European banks with a retail presence in the U.S.

market following the exit of rivals BBVA and BNP

Paribas.

Santander has over $45 billion in retail deposits at its

409-strong U.S. branch network, mainly in nine states in the

northeast, and over $60 billion for auto-related loans.

"We have north of $30 billion of auto assets that are not

funded by the bank today, that are wholesale-funded," Wennes

told Reuters in an online interview late on Friday.

Funding via the wholesale market is more expensive than if

the bank funds the assets directly, but Wennes did not say how

much the bank could save by moving to cheaper funding.

The launch of Openbank, which is Europe's largest digital

bank with over 18.5 billion euros in deposits, is part of

Santander's global strategy to become a digital bank with

branches.

To try and gain market share in deposits in the U.S.,

Santander is initially offering a yield of 5.25% on its savings

account, higher than Goldman Sachs' ( GS ) digital bank Marcus

that gives 4.1% on its online savings account, or the up to 4.7%

from CIT Bank's platinum savings account.

U.S. banks such as JPMorgan ( JPM ) and Bank of America ( BAC )

hold the largest share of bank deposits in the country.

The two U.S. banking giants have been redesigning their

branches to focus on in-person sales of products such as

mortgages and investments, instead of routine teller

transactions. The shift came as digital banking services

proliferated.

Openbank, Wennes said, could also offer small business

deposits at some point. Santander U.S., meanwhile, has no plans

for now to return to mortgage lending as it lacks scale.

Santander exited the mortgage lending business in 2022.

Wennes said that the launch of Openbank, which the bank also

aims to roll out in other countries such as Mexico, would

involve a "very limited" number of hirings as for the most part

it can shift resources from within Santander U.S..

A successful launch of a fully digital offering in the U.S.,

where Santander has 4.5 million customers in total, will be

crucial because the bank's U.S. business has been generating

sub-par returns.

Hiring expenses and higher provisions resulted in a 0.4%

year-on-year fall in net profit in the U.S. in the first half.

Wennes said the bank would analyse how best to grow this

digital platform and "certainly evaluate if partnership

opportunities would make sense".

He also said Santander was "comfortable today" with current

resources deployed at its corporate investment bank in the U.S.

following its expansion after last year hiring former executives

from the collapsed Credit Suisse.