Ahead of the Bell:CEO news drives Sovereign shares

The Wall Street Journal reported the Philadelphia-based bank will name Paul Perrault as CEO as early as Tuesday, citing people familiar with the matter. Perrault would take on the post next year, according to the newspaper, with Chief Financial Officer Kirk Walters assuming chief executive duties from Joseph Campanelli in the interim.

Shares of Sovereign have plunged nearly 80 percent this year amid the turmoil in the financial sector. Earlier this month, the bank sold off its portfolio of collateralized debt obligations, complex investments backed by pool of mortgages or other assets that have plummeted in value since the start of the credit crisis.

The potential development prompted Sandler O'Neill & Partners analyst Joseph Fenech to upgrade Sovereign to "Hold" from "Sell" in a note to investors. Both Perrault and Walters last worked together at the bank Chittenden Corp., he said.

"The proposed change would reunite two well-respected managers from a very well-run regional bank," Fenech wrote in a note to investors.

Shares of Sovereign Bancorp climbed 65 percent to $3.85 in premarket electronic trading.