Banco Santander SA (STD) Chairman Emilio Botin Monday tried to soothe angry shareholders upset about recent setbacks at the Spanish bank, promising "magnificent" results for 2008.

Botin, speaking at a shareholders meeting in the city of Santander, Northern Spain, said results at the euro zone's largest bank by market value would be "among the best of the banking industry."

In June last year, Botin had said he expected the bank to make a 2008 profit above EUR10 billion, including gains from asset sales. The bank is scheduled to report annual results Feb. 5.

While investors had been called to the meeting to approve Santander's share issue to buy the 75% of U.S.-based Sovereign Bancorp it doesn't already own, more than one Santander shareholder took the opportunity to ask Botin how the bank last year came to lose more than EUR2.3 billion of client money by investing with Bernard L. Madoff.

"Many clients have lost all their money on this financial scandal, money they had earlier deposited with the bank that they trusted," said Luis Bericat, a lawyer at Cremades & Calvo-Sotelo, representing dozens of Santander shareholders who lost money through Santander products invested in Madoff.

"These people, Mr. Botin, have been waiting for more than a month and a half for an answer from the bank," Bericat said. "I can assure you that the confidence these people had in the bank has been shattered."

While Santander itself lost only EUR17 million, Santander clients' losses from Madoff investments are by far the largest reported at a single bank. The bank may face hundreds of legal claims from clients in Spain and Latin America who allege that Santander never told them their money was invested with Madoff, lawyers have said.

Botin declined to answer questions related to Madoff, reiterating only that Santander is studying possible legal action on the matter.

At 1319 GMT, Santander's shares were up 4.1% at EUR5.57, broadly in line with other Spanish banks. The Spanish benchmark index, the IBEX-25, was up 0.8%.

Shareholders approved the share issue, even if several investors voiced concern that the deal was a risky bet.

Santander is issuing 177 million new shares, or 2.2% of the bank's current share capital, which will be used to pay for Philadelphia-based Sovereign.

As part of the takeover, Santander plans to take a write-off of $2 billion and cut Sovereign's risk-weighted assets by $10 billion.

Santander also appointed Colombian banker Gabriel Jaramillo as the new chairman and chief executive of the U.S. unit. Jaramillo, aged 58, has been with Santander since 1996 and worked on several of the bank's acquisitions in Latin America in the 1990's.

Santander said Sovereign swung to a small profit in the fourth quarter, after posting $745 million in losses in the first three quarters of 2008. Management expects profit at the unit to rise to $750 million by 2011.

Company Web site: www.santander.com

-By Christopher Bjork and Santiago Perez, Dow Jones Newswires, +34 91 395 81 23, christopher.bjork@dowjones.com

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