Santander Brazil raises $8bn in IPO

Santander of Spain, the eurozone’s biggest bank by market capitalisation, has raised just over $8bn from the listing of its Brazilian subsidiary in the world’s largest initial public offering this year.

The lender announced on Tuesday that it had sold 600m shares at R$23.5 per unit, in the middle of an indicative price range of R$22 to R$25, according to agencies. The bank, which filed to sell 525m units, said the dual São Paulo and American Depositary Receipts offering raised $8.05bn and included an over-allotment of 75m units.

According to Reuters, the bank said it would book €1.43bn ($2.10bn) in capital gains from the offering.

The huge IPO surpassed the July listing of China State Construction Engineering in Shanghai, which raised $7.3bn. It is also the largest ever listing in Brazil.

The sale gives the Brazilian division of Santander a market value about the same as that of Deutsche Bank and Société Générale.

Santander, one of the few banks in Europe which has emerged largely unscathed from the global financial crisis, bought Banco Real as part of the break-up of ABN Amro in 2007.

The purchase saw Santander double the size of its operation in Brazil and made it the third-largest private-sector bank in the country.

Brazil accounted for one-fifth of Santander’s attributable profit in the first half of this year, making the business bigger than the bank’s UK subsidiaries.

The bank has said it would use the proceeds from the sale to buttress expansion in Brazil and boost its tier one capital ratio.

Santander’s ADRs, priced at $13.50 each, will begin trading in New York on Wednesday and the units in São Paulo on Thursday.