Spanish bank Santander aims to raise as much as 13.1 billion reais ($7.2 billion) through the initial public offering of its Brazilian unit, giving the Spanish bank more heft to take on rivals in Latin America's largest economy.

Banco Santander SA, Spain's largest bank, will sell 525 million units at 22 reais to 25 reais. Each unit will include 55 common shares and 50 preferred shares. The offering, managed by Credit Suisse AG, is equivalent to 16.2 percent of the current capital of the Brazilian unit.

Daragh quinn, an analyst at Nomura International in Madrid said that the maximum amount is slightly higher than the expectation and it may be an indication of strong demand. She added that the sale will strengthen Santander's capital position and will help fund possible growth opportunities in Brazil.

Santander Chairman Emilio Botin said that the bank planned to invest 2.56 billion reais in Brazil and open 400 branches as it seeks to become the country's biggest non- government lender. The bank, based in the Spanish city of the same name, has a market share of 10.2 per cent with over 3,600 branches across the country, having expanded via six domestic takeovers in the past 12 years.

In a boost to Brazilian property owners, who have seen the country's economy pulling itself out of recession in the second quarter thanks to a rebound in the industrial and service sector. According to data from Dealogic, if successful, the listing would be the biggest in Brazil and rank as the second-biggest in the world this year, behind the $7.34 billion IPO of China State Construction Engineering Corp.

Labels: Economy