Spanish bank BBVA raises 3.4 bn euros

BBVA, Spain’s second largest bank, said Thursday it had raised 3.43 billion euros ($4.48 billion) via an issue of convertible bonds to boost its capital position.

BBVA said the funds would be counted as core capital, meaning that along with other measures, the bank was meeting requirements set down by the European Banking Authority for lenders to strengthen their balance sheets by mid-2012.

It said in October that it needed 7.1 billion euros to meet the higher capital levels required by the EBA as part of efforts to ensure that the banking system could cope with the stress of another global financial crisis.

Earlier this month, the EBA estimated that the five top Spanish banks, struggling with an economy at risk of recession and a property market collapse, needed more than 26 billion euros in new capital.

BBVA said its cash raising exercise meant it would be able to meet the new capital rules for banks set in the international Basel III accord which come into effect from January 2013.