MEXICO CITY--Mexican bank Grupo Financiero Banorte SAB (GBOOY, GFNORTE.MX) raised $2.5 billion Tuesday in a share offering with which it will fund recent acquisitions and strengthen its capital ratios.

Banorte priced around 447 million shares, including overallotments, at 71.50 pesos ($5.66) each, a 1% discount to Tuesday's closing price on the Mexican stock exchange of MXN72.21.

David Suarez, Banorte's head of investor relations, said demand was 3.4 times the amount offered, or over $8.5 billion, with 60% sold in a global offering and 40% to local investors in Mexico.

Banorte will use a large part of the money to pay for two recent acquisitions from European firms in need of cash: Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) and Italy's Assicurazioni Generali SpA (G.MI). The company will also use proceeds for the purchase of the International Finance Corporation's minority stake in Banorte's main bank unit, and the rest will be used to bolster Banorte's core capital, Mr. Suarez said.

Just two decades ago, Banorte was a small regional bank. But over the past four years, it has engorged on acquisitions to become Mexico's third-biggest bank lender, nearly doubling its loan portfolio to around $32 billion while becoming the country's biggest pension fund manager. Mr. Suarez said Banorte plans to consolidate its acquisitions and isn't currently thinking of making more.

The expansion has positioned Banorte as the biggest local alternative in a country that represented the bulk of BBVA's profit last year and more than 10% of Citigroup's (C).

Banorte Chairman Guillermo Ortiz, who led Mexico's central bank from 1998 to 2009, has in the past criticized the outsized role of foreign banks in Mexico, where the institutions are extremely profitable and yet cautious on lending.

In the aftermath of the global financial crisis, Banorte has proven to be more aggressive on lending growth than Mexico's top two banks. Last year, Banorte grew its loan portfolio by 16%, compared with a 6% contraction at BBVA Bancomer and a 13% expansion at Citi unit Banamex.

The extraordinary market shares of BBVA Bancomer and Banamex, which together are behind around 40% of total commercial bank credit, help ensure rich rates for loans, said Ed Kuczma, an analyst who weighs in on investment decisions at the $350 million Van Eck Emerging Markets Fund in New York.

"The competition is pretty complacent in terms of making sure that pricing doesn't become more competitive and drive yields down," said Mr. Kuczma, describing the Mexican economy as a "cash cow" for foreign banks.

Private-sector financing as a percentage of gross domestic product in Mexico is around 26%, according to World Bank and Mexican government figures, well below international peers and the 50% average for Latin America.

"None of them lend--not the Mexicans and not the foreigners," said Dolores Padierna, a high-ranking senator with the leftist Party of the Democratic Revolution, decrying the tendency of Mexican banks to invest deposits in government bonds, which yield juicy returns with modest risk.

The Mexican government is pushing to boost lending and drive competition among banks, which could nudge rates lower and eventually crimp the financial sector's profits.

Meanwhile, the scarcity of financial-sector stocks in Mexico--both BBVA Bancomer and Banamex aren't publicly traded--contributed to outsized demand for the EUR3.18 billion ($4.15 billion) initial public offering in September of Grupo Financiero Santander Mexico SAB, a unit of Spain's Banco Santander SA (SAN, SAN.MC) and Mexico's fourth-biggest lender.

Banorte placed shares in a tougher environment, since the Mexican economy has shown signs of a slowdown this year and local stock valuations are at a premium to their developed market peers. The bank had previously hoped to raise around $3 billion for the float.

Geoffrey Pazzanese, who helps manage $780 million in assets at Federated Global Investment Management in New York, says concerns about economic growth and valuations led him to slash his Mexico exposure to zero as of June versus an overweight position last August.

Banorte has snapped up assets as firms based in recession-hit Europe attempt to raise cash. The bank paid $800 million earlier this year to cover its half of a purchase, along with Mexico's Social Security Institute, of BBVA's Mexican pension business. And in June, Banorte announced plans to take full control of its Mexican pension and insurance joint ventures with Italian partner Assicurazioni Generali for $857.5 million.

--Anthony Harrup contributed to this article.

Write to Amy Guthrie at amy.guthrie@wsj.com

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