Spanish banking giant Banco Santander SA (STD) has asked Argentine authorities for authorization to sell shares of its Banco Santander Rio SA (BRIO.BA) subsidiary on the local stock exchange, Chairman Emilio Botin said at a meeting with journalists Thursday.

Botin, who spoke following the presentation of the bank's fourth-quarter results, didn't say when the share offering would take place. The executive also said Santander plans to list its U.K. subsidiary through an initial public offering in the fourth quarter if market conditions permit.

According to the latest information on the website of Argentina's National Securities Commission, neither Banco Santander nor Santander Rio have filed for a local share sale. Santander Rio has a tiny float on the Buenos Aires Stock Exchange.

A Santander Rio spokesperson wasn't immediately able to comment on the matter.

Santander's decision to sell shares of its Argentina and U.K. operations follows its successful sale of a 15% stake in Santander Brasil SA (BSBR, SANB4.BR) on the local exchange in that country in 2009. That deal allowed Spain's largest bank to raise more than EUR5 billion in capital.

Banco Santander Chile SA (SAN) already trades in New York and Santiago, while analysts have fingered its Mexican subsidiary, Grupo Financiero Santander SAB (SANMEX.MX), as a likely candidate for a share offering.

By listings its subsidiaries, Santander gives investors greater scope to decide whether they want exposure to high growth countries like Brazil and Mexico or prefer the bank's slower growing European markets.

Investors clearly think Santander Brasil, which accounted for 25% of the parent company's profit of EUR8.18 billion last year, has a bright future. Santander Brasil's current market capitalization is nearly $43 billion, compared to $106 billion for the parent company as a whole.

Brian Joseph, head of fixed income and equity trading at local brokerage Puente, said a Santander Rio share sale would be positive for the local stock exchange.

"It's always positive to see a big company place its capital on the stock market. The market needs companies to list to boost volumes," Joseph said.

Banks shares were the big winners on the Buenos Aires Stock Exchange last year as they benefited from a rally in the government bonds they hold in their investment portfolios and strong loan growth amid a booming economy.

Shares of Grupo Financiero Galicia (GGAL, GGAL.BA) nearly tripled, while shares of mortgage lender Banco Hipotecario (BHIP.BA) and of BBVA Banco Frances (BFR, FRAN.BA) more than doubled in value.

However, the local stock market suffers from low trading volumes due to the absence of major domestic institutional investors and capital controls that require foreigners to deposit 30% of any financial investments they bring into the country in a zero-interest account at the central bank for a year.

Indeed, the average daily turnover in stocks was a paltry 39.4 million pesos ($9.8 million) during the last 12 months, according to exchange data.

Argentina's banking industry enjoyed stellar growth last year as the economy rebounded from what many economists believed was a deep recession in 2009 owing to the global financial crisis.

During the Jan.-Nov. period loan balances expanded 32.7% from the year ago period to ARS219.3 billion, and deposits grew 37.7% to ARS363.7 billion. Banking sector profit rose nearly 44% to ARS10.5 billion.

In the case of Santander Rio, its profit for the full year rose 31.5% to EUR297 million, according to the parent company.

Banks, however, face a more challenging operating environment this year amid high inflation and increasing political noise ahead of congressional and presidential elections in October.

Argentina's heavily criticized national statistics agency reported inflation of 10.9% in 2010, while most private-sector economists say it ended the year around 25% with the risk of accelerating even further in 2011.

The economy is also forecast by the Central Bank of Argentina to expand around 6%, down from estimated growth of 9% in 2010.

-By Ken Parks and Christopher Bjork, Dow Jones Newswires; 54-11-4103-6740, ken.parks@dowjones.com