Santander, the biggest Spanish bank which has undertaken a string of acquisitions this year, today announced a €7.2 billion rights issue to raise capital.
Under the plan, the bank will offer almost 1.6 billion new shares, or one for every four in circulation, at €4.5 each.
'We have taken the strategic decision to operate with higher capital ratios within an environment of greater uncertainty and a market demand for higher capital ratios in the financial industry,' the company said.
Santander is Europe's second-biggest bank by market capitalisation after HSBC of Britain, and the biggest in the euro zone.
Last month it announced that its third-quarter net profit rose 4.3% to €2.2 billion, and said it was on track for record full-year profit despite an abrupt economic slowdown at home and global financial turbulence.
Its solid financial position has allowed it to buy three troubled banks over the past three months. Santander purchased Alliance and Leicester in Britain, as well as some assets of the nationalised Bradford and Bingley, and has agreed to take over Sovereign Bancorp in the US.
It announced last month it has decided not to sell its asset management unit due to poor current market conditions.
