Santander shares slip on capital increase
Shares in Santander, Spain's largest bank, traded lower on Tuesday after it announced the details of a 7.1 billion-euro ($8.1-billion) capital increase to fund its takeover of failing lender Banco Popular.
The bank said late Monday that it will sell about 1.5 billion shares at 4.85 euros each, a 17.75 percent discount to the closing price on Monday, "to support the acquisition of Banco Popular".
The subscription period will begin on Thursday and run until July 20, it added.
Santander said last month it would raise funds to shore up its balance sheet after it took over compatriot Banco Popular for one euro in a deal brokered by European regulators to avert a looming failure of the troubled lender.
The bank said the new stock will start trading on July 31.
Shares in Santander, one of the eurozone's two biggest banks, fell 0.8 percent in late morning trade to 5.96 euros.
The bank said it expects net profit to rise by 24 percent to around 3.6 billion euros in the first half, without taking into account the acquisition of Banco Popular.
"The acquisition of Popular is a unique opportunity to accelerate our strategy in Spain and Portugal," Santander CEO Ana Botin said in the statement.
"We expect it will deliver excellent returns for the bank and its shareholders, while providing important stability for Popular's customers and the Spanish economy."
Santander and France's BNP Paribas are neck-and-neck for positioning as the eurozone's biggest banks by market value.
© 2017 AFP