MADRID -- Banco Santander of Spain won the bidding against Argentaria SA and Banco Bilbao Vizcaya for control of Banco Espanol de Credito, known as Banesto.

The acquisition makes Santander Spain's biggest bank, with $135 billion in assets.

Banesto was taken over by regulators in December after its problem loans exceeded regulatory guidelines.

IBCA Ltd., the London-based rating agency, said Monday it was placing the AA long- and Al-plus short-term ratings of Banco Santander on Rating Watch with negative implications. IBCA said the acquisition could significantly weaken Santander's capital ratios.

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