Spain's Banco Sabadell to raise capital
Banco Sabadell, Spain's fourth-largest bank, said Monday it will carry out a 15.8 million euro capital increase following pressure from the government for the troubled sector to raise more capital.
The Barcelona-based bank will issue 126.4 million new shares, which represent 10 percent of its existing shares, that will then be sold to national and international investors, it said in a statement.
Last week Spanish Economy Minister Elena Salgado announced that all Spanish lenders will have to have a core capital level of at least 8.0 percent by September, more than the 7.0 percent required under new, international "Basel III" rules agreed last year.
The new regulation is part of government moves to strengthen Spain's financial system and fend off market fears that the country may eventually need an Irish-style financial rescue.
Banco Sabadell's core capital stood at 8.20 percent at the end of the fourth quarter, up from 7.84 percent at the end of the third quarter. It intends to raise it to 8.80 percent this year.
© 2011 AFP