Banco Santander, S.A. (NYSE:SAN) (MCE:SAN), Spain’s biggest bank by market value, said Monday it would absorb Banesto and Banif, two subsidiaries, as part of its move to close 700 branches in Spain in order to offset tumbling domestic earnings.

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Santander announced its plan to offer €293 million, or $384 million, to completely acquire minority investors in Banco Santander, S.A. (NYSE:SAN) (MCE:SAN), 90% stake of which is already owned by the Spain’s largest bank. The acquisition took place in 1994, following a massive short fall of capital revealed by an audit report.

This move is part of a broader restructuring of Spain’s fragile financial system, which faced a major collapse in the property market back in 2008. Following the financial crunch, the Government of Spain has been pushing for mergers and acquisitions to form lesser banks.

Banco Santander, S.A. (NYSE:SAN) (MCE:SAN) said that the move to absorb the two subsidiaries will lead to a closure of 700 branches with more job cuts. However, Spain’s largest bank doesn’t intend to reduce staff immediately. It said the job cut plan will follow transfers around the group, voluntary redundancy and natural turnover.

Santander reported that the decision to unify its main brands will reduce its network to a total of 4000 offices in Spain and some 14,000 offices  around the world.

“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,” Santander said.

The take over will not effect Banco Santander, S.A. (NYSE:SAN) (MCE:SAN) operations under its own management.

Santander added that the total number of bank branches in Spain was anticipated to fall down to 30,000 by the end of year 2015. It also said that the segment of Spanish bank branches under the group would rise by 2015.

Other significant branch closures have also been announced by some Spanish banks, including Bankia, whose financial short fall forced the government to convince a European bank to acquire Bankia for a total of €100 billion in June.

Santander’s share price closed Friday at €5.90 while Banesto’s stood at €2.99.