UPDATE 1-Santander Brazil may sell stock in IPO

* Santander Brazil unit considers stock offering

* Sale of minority stake depends on market conditions (Recasts, adds Santander filing, recent offerings)

SAO PAULO, July 21 (Reuters) - Banco Santander SA, the Brazilian unit of Spain's Santander (SAN.MC), said on Tuesday it was considering selling new shares in an initial public offering.

That would make Santander the latest in a string of companies in Brazil to capitalize on improving market conditions by selling shares to raise money.

The bank may sell a minority stake in the primary offering, depending on market conditions at the time, Banco Santander said in a securities filing, without giving details of the plan.

Spain's Santander controls 98.4 percent of the Brazilian unit's common shares (SANB3.SA) and 97.4 percent of preferred shares (SANB4.SA).

Santander, the third-biggest private-sector bank in Brazil by assets according to central bank data, has expanded its presence in Latin America's largest economy through a slew of acquisitions in recent years, most recently by taking over ABN Amro's local unit.

Santander Chairman Emilio Botin has said the Brazilian business should account for 20 percent of the bank's profit in the near future.

Stock offerings in Brazil, which fizzled in 2008, have gained steam in recent weeks with the sale of nearly 11.5 billion reais ($6.05 billion) in shares since late June, including the record-setting IPO of credit-card processing company VisaNet VNET3.SA.

Companies including processed-foods business Perdigao SA PRGA3.SA and cosmetics maker Natura (NATU3.SA) have also filed to sell stock in the near future.

Santander may sell up to 6 billion reais ($3.15 billion) in stock in local capital markets, Valor Economico newspaper reported on Tuesday, without citing sources for the information.

A spokeswoman for Santander in Sao Paulo said the bank would not comment on the Valor report.

The sale is planned for the second half of the year and is part of a drive by Santander to bulk up its capital base in Brazil and increase lending in the country, the daily said.

Santander, Bank of America's (BAC.N) Merrill Lynch, Credit Suisse (CSGN.VX) and UBS (UBSN.VX) will be the underwriters of the stock offering. ($1=1.9 reais) (Reporting by Elzio Barreto, editing by Maureen Bavdek)