Santander to raise funds
EUROPE’S largest bank Santander is to become the latest Spanish bank to issue preference shares to bolster its capital ratios and increase liquidity.
The bank is understood to be seeking the blessing of the country’s market regulator to issue preference shares worth €2.5bn (£2.2bn), although a spokesman for Santander was unable to confirm the reports.
The issue is believed to be aimed at replacing earlier issues that the bank is to redeem after five years and follows similar moves by Spanish rivals.
BBVA, the second largest Spanish bank after Santander, raised €1bn via a preference share issue late last year – a measure that was quickly mimicked by a host of other lenders, which opted to raise around €12bn between them. Santander, which own Abbey National in the UK, is likely to pay a better-than-average interest rate on the preference shares, given its financial strength.