Banking giant Santander has sold its Colombian business as it works to fulfil tough new obligations imposed by the Spanish government on the financial sector.
As its banks creak under the weight of bad loans handed out during the country's massive property boom, the Spanish government has demanded the industry puts €84bn aside to cover bad debts.
Partly to help fund this new obligation Santander is selling Banco Santander Colombia and its subsidiaries to Chilean group Corpbanca.
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The deal will be done in two stages and will net Santander around €615m in total.
The Spanish bank said the first half of the transaction had been completed as of Wednesday, with the sale of 51% of the issued shares in Banco Santander Colombia and Santander Investment Trust Colombia.
There are growing fears that Spain's attempts to shore up its banking system are not going to work and the country will be forced to ask for a bailout.
There are reports that the European Central Bank has blocked the Spanish government's attempts to pump €19bn into lender Bankia.
ECB officials said the method it planned to use effectively amounted to state aid from the bank, something that broke EU laws on the central bank funding governments.
On Monday three Spanish savings banks, Ibercaja, Liberbank and Caja3, approved a merger to strengthen their weakened balance sheets.
Yields on benchmark 10-year Spanish debt pushed back above the 6.5% on Wednesday morning, closer to the 7% level regarded as unsustainable.
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