MADRID – The government has sought to calm fears of any impending diplomatic crisis with Venezuela after President Hugo Chávez announced that he will nationalise Banco Santander’s affiliate, Banco de Venezuela, before it could be sold to a private investor.

Deputy Prime Minister María Teresa Fernández de la Vega has said any transaction would be carried out through "dialogue and negotiation".

The nationalisation was announced on Thursday as Santander President Emilio Botín was set to close the deal to sell Banco de Venezuela to Victor Vargas, owner of Banco Occidental de Descuento, financial sources had confirmed.

Caracas press reports published in the second part of July said that Santander had made an offer to sell Vargas the bank for between EUR 770 million and EUR 1.2 billion.

[El Pais / Expatica]