Banco Santander of Spain, the bank with the largest market value in the euro zone, announced it had added cushion to its capital, bring its core capital ratio to 9%.  That's 6 months ahead of the deadline set by Europe’s main bank regulator.  Last year, the European Banking Authority ordered Santander to raise 15 billion euros in capital, the most of any bank in the European Union. Santander’s quick move to reach the capital reserve requirement for European lenders was aimed at differentiating the bank from its more troubled peers in France and Italy.  As with other banks, Santander has also been selling assets and cutting back on loans in order to preserve capital. Transactions by Santander. The bank said it had met the ratio largely by converting 6.8bn euros of bonds into shares, retaining profits and transferring a 4.4% position in its Brazilian unit to an outside investor, thus allowing the stake to be counted as core capital. According to Santander CFO José Antonio Alvarez, the transactions demonstrate that the bank has "plenty of financial flexibility" and that, while “Spain is in recession, [Santander's] balance sheet and capital base are in a better situation” than those of competitors. This is not meant to say that Santander doesn't feel the effects of the sovereign debt crisis and the very stingy funding market.  It does, like the other large banks - however, the bank is less exposed to Spain;s stagnating home market because it's diversifed with a large presence in Latin America and Britain. Continued Strengthening. Santander further announced plans to increase its capital ratio to 10% by June.  It will hold, or maintain, its yearly dividend per share at 60 €-cents for a 3rd consecutive year.   [DealBook, 1/9/12]