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                                                                    EXHIBIT 10.1

March 23, 2005

Mr. Jose Ramon Gonzalez
Santander BanCorp
Puerto Rico

Dear Mr. Gonzalez:

We hereby confirm the terms and conditions with regards to your ratification as
President and Chief Executive Officer of Santander BanCorp and Banco Santander
Puerto Rico (hereafter "the Group"):

      1.    As agreed upon, we have agreed to terminate your employment
            agreement dated April 30, 2002 and which shall be replaced in
            accordance to the terms and conditions set forth herein, which shall
            be effective from January 1, 2005, without recourse amongst the
            parties.

      2.    In your position, you shall be responsible for and will supervise
            all of the business operations of the Group in Puerto Rico.

      3.    The conditions set forth herein shall be in full force and effect
            for two years commencing on January 1, 2005 and ending, therefore,
            on January 1, 2007.

      4.    During the period whereby these conditions are in full force and
            effect, the Group may terminate your employment if there is just
            cause, without any compensation whatsoever. The Group may also
            terminate your employment without just cause. In this latter case,
            you shall receive as indemnity the greater of the following amounts:

                  a.    The pending gross amount due from the time of
                        termination of employment until the date of expiration
                        of this Agreement (January 1, 2007) in accordance to the
                        annual salary set forth in Section 5; or

                  b.    $1,250,000 gross

                  If by the term of expiration of this Agreement the parties
                  have not renewed the same, the Group shall pay, unless you
                  have been offered an extension to this Agreement under the
                  same terms and conditions hereby established and the extension
                  was rejected by you, in which case a payment of $1,250,000
                  shall be made as the final compensation for your separation
                  from the Group, as so thereby liberating you from any
                  additional responsibility under this Agreement, with exception
                  to the temporary non-competition clause under Section 7.

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Jose Ramon Gonzalez
March 23, 2005
Page 2

                  In the case of a change in control of the Group in Puerto
                  Rico, the Group shall compensate you the gross amount of
                  $1,250,000 if the Group does not maintain you in your present
                  position and classification, or if there is a separation from
                  your position, or if any of the terms set forth herein shall
                  not occur. Consequently this indemnity shall not be
                  cumulative. As to the effects of this Agreement, "change in
                  control" shall be defined as any circumstance that will cause
                  Banco Santander Central Hispano, S.A. to decrease its
                  beneficial ownership to less than 50% of the common stock in
                  circulation.

      5.    Your gross annual salary for the year 2005 shall be $650,000.00. For
            the year 2006 this annual gross salary shall be $700,000.00. This
            salary shall be distributed in the payment installments that the
            Group has established.

            You will remain under the bonus policy of the Group. In that regard,
            this policy shall be determined with each bonus period that will
            take place under the following terms:

                  a.    Three quarters ( 3/4) of its amount shall be determined
                        by reaching the annual budget of the Group and the
                        conditions established by the Group's Compensation
                        Committee.

                  b.    The remaining one-quarter will be based on the Santander
                        BanCorp stock in regard to other competitors of
                        reference in accordance to the agreed schedule, of which
                        the Santander BanCorp Compensation Committee shall
                        inform you.

                  Also, you may be eligible to participate in other
                  compensations schemes that may be established by the
                  Compensation Committee.

      6.    The remainder of conditions and benefits shall be governed in
            accordance to the applicable policies of officers and employees of
            your position at the Bank and other terms and conditions agreed upon
            by you and so established in your July 19, 2001 contract.

      7.    You acknowledge that the functions and duties that you will perform
            under this agreement are of an essentially confidential nature, and
            as so you will privy of facts, matters, plans and strategies, as
            well as confidential financial information of the Group and its
            clients. Therefore, you agree to maintain in absolute
            confidentiality and abstain to disclose this information during and
            after the term of this agreement.

            In the supposed termination given under the circumstances
            contemplated under the before the last paragraph of the fourth
            section, in consideration of the benefits granted hereunder and the
            specific compensation recognized under such section, you shall
            refrain from performing similar services to those performed or will
            perform for the Group nor for any of its direct competitors of the
            Group within the jurisdiction of Puerto Rico, until twelve months
            have elapsed from your date of last employment with the Group.

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Jose Ramon Gonzalez
March 23, 2005
Page 3

      8.    Should any dispute arise with regards to the interpretation,
            validity, compliance, or early termination of this agreement that
            shall not be solved by the parties, you hereby agree to submit to
            compulsory arbitration in the City of San Juan, Puerto Rico, in
            accordance to the American Arbitration Association rules. The party
            that requests the arbitration must notify the other party, no later
            than ten (10) days. The Bank shall pay the arbitration costs,
            including the arbiter fees. Each party shall be responsible for its
            own attorney's fees as well as the preparation and presentation of
            evidence.

      Please execute this agreement as a sign of your approval. I take the
      opportunity to wish you great success in your functions.

      Sincerely,

      By: /s/ Maria Calero Padron
      Executive Vice President

      Signature of approval:

      By: /s/ Jose Ramon Gonzalez