Santander unveils new share issue

Santander is the euro zone's largest bank by market capitalisation

Spanish bank Santander has announced a 7.2bn euro ($9.24bn, £5.9bn) rights issue to raise new capital.

The bank will issue one new share for every four in circulation, with preferential subscription rights for current Santander shareholders.

It will issue 1.598bn new shares at a price of 4.50 euros each.

Santander, which recently bought the UK's Alliance & Leicester, also plans to put on hold the sale of some of its assets until market conditions improve.

The bank, which has also acquired some assets of Bradford & Bingley in the UK, is trying to take over Sovereign Bancorp in the US.

Santander is the eurozone's largest bank by market capitalisation and second-biggest in the world after HSBC.

The bank said that as it didn't have acquisitions plans, the capital increase wasn't related to acquisitions.

Neither, it said, did it represent a "deterioration trend" in the bank's lines of business.

Santander said it was seeing "lower business volume than what we envisaged at the beginning of the year, but higher spreads, and better cost control".

In October Santander reported a 4.3% rise in its third-quarter net profit to 2.2bn euros due to cost cuts and said it was on track for record annual profit.