(Refiled to make clear final quote was made before Botin's appointment)
* Santander chairman Emilio Botin dies aged 79
* Eldest daughter Ana Botin to succeed - sources
* Santander shares fall 1.1 percent
By Sonya Dowsett and Sarah White
MADRID, Sept 10 (Reuters) - Banco Santander named Ana Botin as its new head on Wednesday after her father Emilio's sudden death, making her one of the top women in banking and continuing her family's century-old management of what is now the euro zone's biggest lender.
Botin, who recently restructured Santander's UK division ahead of a probably stock market listing, had long been tipped to take over from Emilio, who turned the bank during his 28 years at the helm from the small domestic lender run by his father into a global financial institution.
The succession by the fourth generation of the family happened sooner than expected, after Santander announced earlier on Wednesday that Emilio had died at the age of 79 from a heart attack.
Now, his daughter, aged 53 and a longtime investment and retail banker who speaks five languages, will be under pressure to do at least as well. She will navigate the bank through an upcoming industry health check by the European Central Bank which experts say it should pass. Longer term, investors expect her to boost the profitability of the bank to sustain its hefty dividend, in addition to seeking new markets.
"The appointments and remuneration committee considered Ana Botin is the most appropriate person, given her personal and professional qualities, experience, track record in the group and her unanimous recognition both in Spain and internationally," the bank said following a board meeting.
Botin's appointment is viewed as controversial by some who contest the family's longtime management of the bank, even though they now own only 2 percent of its shares. The implosion of Portugal's Banco Espirito Santo bank, whose founding family's holdings are being investigated for financial irregularities, has also cast a pall over corporate dynasties.
"Succession shouldn't just be saying 'my daughter's going to take over'," said a corporate governance expert at a global asset manager which owns Santander shares, speaking on condition of anonymity before Ana Botin's appointment.
But many said Botin, who has spent most of the last 25 years at Santander, would provide welcome continuity at a bank whose low-risk profile and international expansion helped protect it from southern Europe's recent crippling economic downturn.
"The key issue is whether or not family control is a good or a bad thing. Ultimately this depends on individuals and his (Botin's) daughter is a chip off the old block," said Philip Saunders, co-head of multi-asset at Investec Asset Management.
"More often than not, family control or strong influence tends to bolster long termism which is particularly important in a banking context given that banks typically behave in an overly pro cyclical manner and destroy shareholder value as a consequence," he said.
With Ana Botin now chairing the group, a gap is left at Santander's UK arm just as it prepares for a separate share market listing. UK Finance Director Nathan Bostock has been lined up as her replacement, but he only joined a month ago. The UK arm is also looking for a new chairman.
Emilio Botin, "El Presidente" to co-workers, was at the forefront of a drive to create global banks, offering a one-stop shop to multinational companies and a range of services to consumers.
He used a keen eye for deals to spread Santander's red-liveried brand with its stylised 'S' logo around the world, amassing 1.4 trillion euros ($1.8 trillion) of funds and nearly 200,000 employees.
"He was a man who has been able to make Banco Santander the most important bank of our country," Spanish Prime Minister Mariano Rajoy told journalists in Parliament.
"I had a meeting with him last week and he was well and in good form. It has been a surprise and a blow."
Botin shook up Spanish banking with a campaign to attract depositors in 1989, forcing rivals to compete on price, and bought troubled Banesto in 1994 to create Spain's biggest bank.
He took advantage of cultural and language ties to expand rapidly into Latin America, and in 2004 snapped up Britain's Abbey National for more than 9 billion pounds ($14.5 billion).
More canny dealmaking followed. In 2007, Santander made 2.4 billion euros in three weeks through deals to buy and then sell Italian bank Antonveneta. And while partners RBS and Fortis were driven to seek state bailouts after a carve up of ABN Amro on the eve of the financial crisis, Santander emerged comparatively unscathed with the Dutch group's healthier Brazilian arm.
The expansion helped to shield Santander from the euro zone debt crisis and Spain's long-running recession, with the bank now making only about 14 percent of its profit at home.
But it has not been all success. Santander has trailed the total returns to shareholders delivered in the past 10 years by rivals JPMorgan and HSBC - two firms against which Botin liked to measures himself, according to colleagues.
There has been controversy too. Botin's family, which owns barely 2 percent of Santander, paid 200 million euros in penalties in 2011 to avoid charges of tax evasion related to a secret Swiss bank account.
Though few doubt Ana Botin had a strong claim to succeed her father, some have been critical of her family's influence over the bank. Earlier this year two shareholder advisory firms, ISS and Glass Lewis & Co, recommended investors vote against her re-election as a director, in one case saying the Botins were over-represented on the board since the board then had three family members including Emilio Botin.
But in the event Ana Botin got the backing of 81.3 percent of the votes, almost unchanged from three years earlier.
"Botin was the unofficial king of Spain. His death creates uncertainty and a power vacuum at the top," said a London-based hedge fund manager before Ana Botin's appointment.
"The obvious successor is his daughter Ana, which was always the plan, but he hasn't had a proper chance to groom her and install her as chairwoman before he died."
(1 US dollar = 0.6198 British pounds)
1 US dollar = 0.7731 euros Additional reporting by Elisabeth O'Leary, Paul Day and Jesus Aguado in Madrid and Lionel Laurent, Simon Jessop and Steve Slater in London; Editing by Mark Potter and Greg Mahlich