Banco Santander to raise euro 7.19 bn via rights issue

Spain's banking major Banco Santander SA today said it will raise euro 7.19 billion through issue of shares on rights basis.

The bank said in a statement that it will raise euro 7.19 billion through issue of 1.59 billion shares on rights basis at a price of euro 4.5 per share.

The fully underwritten issue would help in increasing the bank's share capital by a nominal amount of euro 799.4 million.

"The purpose of the share capital increase is to improve Banco Santander's core capital ratio," the statement added.

Santander would offer one new share for every four in circulation. The subscription period shall have a duration of 15 calendar days and would commence once the relevant prospectus has been registered with the Spanish Securities Market Commission.

In September, Banco Santander SA took over the retail deposits and branch network of Bradford & Bingley (B&B) for pounds 612 million following announcement of the British government to nationalise B&B, which had suffered huge credit-related losses.

Banco Santader had posted a 4.35 per cent growth in third quarter consolidated profit of euro 2,205 million compared to the same period last year, which underlined its capacity to generate earnings in a very complex environment of global economic slowdown.