Santander in surprise €7.2bn rights issue

The Spanish owner of Abbey, Alliance & Leicester and Bradford & Bingley’s savings division in the UK, will issue 1.6bn in fully underwritten new shares at €4.5 each. New Bank of America subsidiary Merrill Lynch will act as the underwriter, reports suggest. The Spanish Government has not yet taken action to buy bank shares, with Prime Minister Jose Luis Rodriguez Zapatero last month suggesting his country did not need a bail-out facility, as its banks are solvent. Zapatero did however set aside €100bn to guarantee inter-bank lending, part of the coordinated European effort to revive ailin...