MADRID — Spain's Banco Santander SA said Monday it had reached the 9% core capital level demanded by the European Banking Association after taking measures in recent months to boost its solvency, including several asset sales.

In the latest such deal, Santander — the largest bank in the euro zone by market value — said it had transferred stock equivalent to 4.41% of Banco Santander (Brazil) SA to a "major international financial institution" which will deliver these shares to holders of convertible bonds issued by the unit in October 2010.

By transferring shares to a third party, Santander can count them as core capital now under the EBA's criteria instead of having to wait until they convert in October 2013. The EBA doesn't allow banks to count convertible bonds as capital of the highest quality.

In its recent round of stress tests on European banks, the EBA found that Santander needed to raise €15.30 billion ($19.4 billion) to meet stricter capital ratio requirements. Banks have until June this year to reach a core capital ratio of 9%, the EBA has said.

The Brazilian convertibles are held by the Qatari sovereign wealth fund, Qatar Holding, which bought them for $2.72 billion.

The Brazil deal "is a way of benefiting from the transaction now, and that was a surprise to me," said Espirito Santo analyst Juan Pablo Lopez.

Banks in Europe are under pressure to shore up their capital amid unprecedented financial stress on the continent. Investors are concerned about bank balance sheets, which are brimming with government debt from the region.

In order to stand out as well capitalized, Santander is targeting a 10% core capital ratio by the end of June 2012, an estimate it reiterated Monday.

As part of this push the lender recently sold a stake in its Chilean division as well as a small bank in Colombia. These deals, plus the Brazilian transaction and retained earnings, have allowed the bank to add €4.89 billion ($6.2 billion) to its capital buffers.

Santander also exchanged preferred shares for new ordinary shares, booking a €1.94 billion ($2.5 billion) gain, while another €1.66 billion ($2.1 billion) is coming from the distribution of 2011 dividends as shares instead of cash.

In addition, Santander in October this year plans to convert into shares some €6.83 billion ($8.7 billion) worth of bonds it sold four years ago to retail investors in Spain.

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