Spanish banking giant Banco Santander has announced that shares of Grupo Financiero Santander Mexico will be listed at an initial public offering (IPO) price of 31.25 Mexican pesos, or 2.437 dollars per share. The price values the Latin American unit at €12.78bn, making it the 82nd largest bank in the world in terms of market capitalisation. The market had been expecting the shares to be priced at the bottom part of the 29 - 33.5 pesos target range.Santander President Emilio Botin explained that the shares to be floated represent 24.9% of Santander Mexico's share capital, with 21.7% already placed in the market and the remaining 3.2% reserved as a green shoe (over-allotment) option available for 30 days for underwriters.The listed shares will be valued between €2.77bn and €3.18bn depending on whether the green shoe option is exercised, making it the largest Latin American flotation in 2012 and one of the largest globally this year.With this capital increase, Banco Santander expects to improve its core capital by half a percentage point; it stood at 10.1% at the close of the first half-year.Of the new shares to be floated, 19% were issued in Mexico while the remaining 81% were issued in the United States and other countries. The ADR (American Depositary Shares) of Santander Mexico will begin trading in the New York Stock Exchange this Wednesday, September 26th while the underlying shares will trade in Mexico.Botin explained that the flotation marks a new stage in the Mexican bank's history which will boost growth and development plans in the country."This operation reflects the strength and flexibility of Santander's subsidiary model on liquidity and capital. The listing of our Mexican unit is an important step in our strategy of having all our significant subsidiaries listed in public markets," he said.SC