The capital increase via a bonus share issue to existing shareholders would hike its capital ratio - a measure of solvency - by 40 basis points to 10.6 percent, the bank said.

Shareholders would receive five new shares for every nine shares held in the mid-sized bank through the issue of 313 million shares said Bankinter.

Bankinter is one of Spain's healthier lenders, with less exposure than others to a damaging property boom and bust, which ultimately led Spain to ask Europe for a 40 billion euro bailout for its banks.

The money for the issue comes from latent capital gains accumulated on Bankinter's balance sheet since 2004 when the lender updated the value of its real estate assets, the bank said.

The extra shares will be awarded to shareholders in addition to dividend payments, Bankinter said.