Brazilian IPO to fund 600 branches, boost capital, says Santander

Spain’s largest bank Santander will
raise up to BRL15.6 billion ($8.6 billion) with the IPO of its
Brazilian unit, Santander Brasil. Around 70 percent of the proceeds
have been earmarked to boost its network in the country by 600
branches in the south and south-east of the country, and increase
lending.

According to the IPO prospectus, Santander
will use 20 percent of the funds to improve its funding structure,
with the remaining 10 percent used to increase its Basel capital
requirements.

Santander’s Brazilian arm, doubled by the 2007
acquisition of Banco Real as part of the three-way carve-up of ABN
AMRO, currently comprises 21 million clients, 3,612 branches and
18,077 ATMs, giving it a 10 percent market share.

In a regulatory filing, Santander said it
planned to sell 525 million Brazilian and US-listed units at
between BRL22 to BRL25 each, amounting to 16.21 percent of the
current capital and valuing its Brazilian arm at between $45
billion to $52 billion. The unit reported first-half profits of
BRL2.45 billion, up from BRL2.17 billion a year earlier.

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