Investing.com – European bank shares were hit on Thursday after Banco Popular (MC:POP) announced a capital increase before the market open.
The Spanish bank told its market regulator CNMV that it planned to increase capital by €2.5 billion ($2.8 billion) in order to strengthen its balance sheet, as well as to help accelerate the sale of real estate assets and be able to continue paying dividends.
Popular decided to issue up to 2.004 billion new shares at a price of €1.25 euros each, a discount of 47% when compared to Wednesday’s close.
At the European open, the Spanish banks shares crashed more than 25%, but mid-morning had pared losses to around 20%.
At 9:25AM GMT, or 5:25AM ET, the Stoxx 600 Banks PR was down more than 1%.