Ibercaja, the mid sized Spanish financial institution, said on Thursday that it has settled an agreement to buy out Caja 3, a smaller Spanish bank. This is the latest in a series of mergers that have caused a contraction in the Spanish banking system to just 15 today from a high of 40 five years ago.

Ibercaja is but one of the few Spanish banks that did not opt for bailout funds in order to cover its losses during the last property crisis that had hit Spain. 

Caja, for its part had taken Eur407 million or US$524 million in European bailout funds as part of the overall Eur41 billion bailout of the banking system in Spain.

In a formal statement, Ibercaja announced that three former savings institutions that formed Caja 3 is set to own 12.5% of the capitalization of the bank. The merger hopes to make for a leaner Ibercaja for the future.