The Brazilian unit of Spain's Banco Santander SA (STD) has girded itself for battle against local rivals in the best way possible - by holding the world's biggest share offer so far this year.

Tuesday night, Banco Santander Brasil (SANB11.BR) raised 14.1 billion Brazilian reals ($8.05 billion) from an initial public offering of shares on the Sao Paulo Stock Exchange, the BMFBovespa. The bank sold 600 million units. Each unit, which is represented by 55 common shares and 50 preferred shares, was priced at BRL23.50.

The Santander IPO is the biggest ever in Brazil and ranks as the biggest in the world so far this year, ahead of the $7.34 billion IPO of China State Construction Engineering Corp. (601668.SH), according to data from Dealogic.

In June, Brazilian credit-card networking company Visanet (VNET3.BR) raised BRL8.4 billion, Brazil's biggest IPO up to that time.

"The next step is to see whether Santander delivers the profits investors are hoping for," said Januario Hostin, an equities analyst at the Leme investment fund. "Investors are going to be interested in Santander's strategies against its powerful local rivals."

In the private sector, those rivals are Itau Unibanco Holdings SA (ITUB) and Banco Bradesco SA (BBD), traditional banks with vast nationwide networks of branches and partners. In the public sector, Santander faces off against Brazil's largest bank by assets, government-controlled Banco do Brasil (BBAS3.BR).

Tuesday's share offer should help.

With its billionaire offer, Santander became the fifth-largest Brazilian company in terms of market value, worth a total of BRL95.7 billion. Santander is behind state-run energy giant Petrobras SA (PBR), mining company Vale SA (VALE), Itau Unibanco and Bradesco.

The operation reinforced Santander's bet on Brazil.

"The country suffered less than its peers during the global crisis. Brazil pulled out from this crisis better than before; the economy has actually improved," said Fabio Barbosa, chief executive of Banco Santander Brasil, at a news conference Wednesday.

The bank invested heavily in Brazil over the last decade and wants to establish itself alongside Itau Unibanco and Bradesco as a retail bank with a nationwide reach.

Santander has a network of 2,091 branches and 1,521 onsite service units throughout Brazil. The bank has 21 million customers in the country. Brazil's population is 190 million.

Santander has said that the bulk of the proceeds from the share offer would be spent on opening 600 more branches in Brazil by 2013, expanding its network by almost a third.

The Spanish bank has been building its presence in Brazil since 2000, when it acquired Sao Paulo state-controlled bank Banespa for BRL7 billion.

Then in 2007, Santander acquired local retail bank Banco Real as part of a consortium deal with Real's previous owner, Dutch bank ABN Amro Holding NV.

As a result, Santander became Brazil's third-largest private bank.

As of 1750 GMT, Banco Santander's shares were up 0.6% at BRL23.64 on the Sao Paulo Stock Exchange.

-By Rogerio Jelmayer, Dow Jones Newswires; 5511-8812-5961; rogerio.jelmayer@dowjones.com