Washington DC - The US Federal Reserve on Tuesday announced it had approved the acquisition of Connecticut-based Webster Bank by Spanish financial giant Santander, a deal valued at $12.2 billion.

The acquisition is part of Santander's push to expand in the US, where it currently has a footprint in nine states and operates more than $81 billion in consolidated deposits.

Webster Bank has a large footprint in the US northeast, operating consolidated deposits of approximately $69 billion, according to the US central bank.

"On consummation of this proposal, SHUSA (Santander's US holding company) would become the 19th largest insured depository organization in the United States, with consolidated assets of approximately $253.6 billion," the Federal Reserve said in a statement.

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The deal for the retail and commercial bank "will create a stronger, more competitive bank for customers," Santander said in a statement in February.

The Spanish banking giant said the Webster acquisition would make it a top-10 retail and commercial bank in the US by assets.

In April, Santander reported "record" first-quarter profit as customer growth and strong commercial activity outweighed global economic uncertainty caused by the Middle East war.

Santander is a major player in Europe and Latin America, and the Webster acquisition is part of its goal to grab more of the lucrative US market.