MADRID (Reuters) - Spain’s largest bank Santander (SAN.MC) said it would study fully absorbing its 90-percent owned subsidiary Banesto BTO.MC, the latest move in a round of consolidation among the country’s lenders.
The absorption would cost the parent around 218 million euros ($285.8 million) at Banesto’s closing stock market price on Friday.
Trading in both banks’ shares was suspended on Monday following the announcement.
In a statement, Santander said its board would meet to consider the absorption of the smaller bank, which had said last month it was studying selling its network of branches to Santander.
Spain’s banking system, badly damaged by a slump in the property market and prolonged recession, has been forced to rein in costs and to rid balance sheets of around 185 billion euros of toxic real estate assets.
The country has became a focal point of the euro zone debt crisis on concerns its struggling banks may need more financial support as the state struggles with one of the largest public deficits in the euro zone. ($1 = 0.7628 euros)
Reporting by Sarah Morris and Robert Hetz; Writing by Paul Day; Editing by David Holmes