The Spanish banking giant Banco Santander SA Monday said its capital ratios will remain significantly higher than the tighter capital rules of Basel III, even after digesting a string of recent acquisitions in Poland, the U.K., Germany and Mexico.
In a conference call, Finance Director Jose Antonio Alvarez said that Santander expects its core capital ratio to stand between 8.4% and 8.6% by the end of 2011, roughly in line with the 8.6% it recorded at the end of the first half of this year, as the bank generates additional capital by retaining part of its profit.
Santander said Friday it had agreed to buy a 70% stake in Bank Zachodni WBK of Poland from Allied Irish Banks PLC, for 2.94 billion euros ($3.7 billion). It also will launch a bid for the rest of the Polish lender.
Last month it acquired 318 retail branches from Royal Bank of Scotland Group PLC that were located primarily in northwest England. It also recently bought assets in Germany and Mexico.
Alvarez said that these acquisitions will consume between 1.2 and 1.4 percentage points of Santander's core Tier 1 capital.
However, Alvarez estimated that Santander will generate a similar amount of capital from retained earnings and by paying out part of the dividend in new shares.