MADRID (AFP) ― Banking giant Santander said on Monday that it will absorb two of its Spanish offshoots, closing 700 branches in the latest stage of Spain’s great banking shake-up.

Santander, the biggest bank in the eurozone by market value, said it could save 520 million euros ($680 million) a year by absorbing the offshoots, Banesto and Banif.

They will be merged into the Santander brand, which would have 4,000 branches under the same name in Spain.

“This transaction is part of the restructuring of the Spanish financial system, which involves a significant reduction in the number of competitors and the creation of larger financial institutions,” the bank said in a statement.

Santander, which already owns 90 percent of Banesto, said it would pay the offshoot’s minority shareholders with Santander stock, offering a premium of 25 percent.

“This is a good transaction for everyone,” Santander chairman Emilio Botin said in the statement, saying customers would have access to a global network and staff would have international opportunities.

Spain’s eurozone partners agreed in June to provide up to 100 billion euros to rescue the crippled banking system, overloaded with bad loans extended during the housing bubble that popped in 2008.

Santander said its merger with Banesto and with its fully owned Banif unit would lead to the closure of about 700 of the three banks’ 4,664 branches.

But the group said it would lower job numbers gradually through voluntary departures without “abrupt cuts.”

Santander currently employs around 18,000 people in Spain, Banesto 9,000 and Banif 550.

The restructuring would save about 10 percent in costs, or 420 million euros in the third year, it said. Revenues were expected to rise by 100 million euros in the same timeframe.

The lower costs and higher revenues would mean pre-tax savings of 520 million euros from the third year, it said.

Despite the cuts to the network, Santander said its share of Spain’s bank branches would actually rise because of the contraction of the industry overall.

At the end of 2015, Spain would have an estimated 30,000 branches overall, it said, a decline of 35 percent.

Santander, along with BBVA, was one of only two Spanish banks billed strong enough to survive without rescue aid in an audit published in September by U.S. firm Oliver Wyman.

Manuel Romera Robles, an analyst at Spanish business school IE, said Santander had seized the opportunity to launch the merger now during the general banking shakeup.

“It is much easier at the moment to put it to the market without it upsetting the market,” he said.

He said the move could help Santander lower its tax bill and strengthen its capital base.

“It is more important than ever to be big,” said Romera.

“The bigger the banks are, the more easily they can make economies of scale in terms of credit risk, operational and market risk.”

Santander’s shares fell on the Madrid stock exchange on Monday after the announcement, closing 1.19 percent lower on the IBEX-35 index which was up 0.20 percent overall.

The 2008 collapse of a building boom plunged the country into recession with one in four workers currently unemployed.

The biggest casualty of the banking crisis in Spain, Bankia, has announced it will cut up to 6,000 jobs and another rescued bank, NCG, said it will lay off 2,500.