MADRID | By J.P. Marín Arrese | Santander´s management has provided little explanation for the huge 10% capital increase launched last week. The official announcement vaguely notes the need to seize new opportunities when economic prospects are improving. Can we bet on such a promising outlook when so many uncertainties prevail in Europe? It doesn’t seem very convincing. Rumours on potential take-overs also seem rather odd, as raising cash before entering a bid will only serve to increase the final bill. It makes more sense to gauge this move as a means aimed at buttressing the bank´s own funds.
MADRID | The Corner | The European banking industry has already increased capital for €25.7 bn this year. According to an Ernst&Young’s poll they could continue doing it after next October’s stress tests. Of those 294 European financial entities surveyed, 30% say they can not rule out a capital increase at all- mainly Spanish and Austrian-, while 8% affirm they will probably need to do it.