Santander sells stake in Colombian offshoots

Spain\'s Santander bank, the biggest in the eurozone by market value, said on Wednesday it had sold a 51-percent stake in its Colombian offshoots for $624 million (497 million euros). Profits from the sale would go to strengthening the bank\'s balance sheet, it said in a statement. The bank had announced in December an agreement to sell its subsidiaries Banco Santander Colombia and Santander Investment Trust Colombia to Chilean group Corpbanca for $1.225 billion. The sale would now take place in two stages, it said: first, the just-completed sale of a 51-percent stake and then the sale of the remainder by June 30 this year at the latest. This would give Corpbanca the time to raise capital for the purchase, Santander said. Overall, the transaction would generate profits of 615 millions euros, to be used to protect the bank from future declines in the value of its property-related assets. \"The profits will aloow provisions to be made of approximately 900 million euros to partially cover the cleaning up of property assets that must be completed by the end of the financial year,\" it said. The government this month instructed banks to set aside an extra 30 billion euros in 2012 in case property-related loans go bad, on top of 53.8 billion euros required under reforms enacted in February. Santander has calculated that the latest reform will require it to set aside an extra 2.7 billion euros this year.