May 23 ( — The Andalucian based Spanish savings bank Cajasur, controlled by the Roman Catholic Church has been taken control of by Spain’s central Bank Saturday amid growing concerns over Spain’s ability to clean out its public finances and creditworthiness.

Cajasur raked up hundreds of millions of euro losses as its struggled to cope with the growing financial crisis, which cost the bank 596 million euros losses in 2009 and 114 million in the first quarter of 2010.

CajasurThe Spanish central bank plans to sell troubled savings bank Cajasur to the highest bidder as soon as possible. This is the second time the Bank of Spain stepped in in the bank since the beginning of the financial crisis in 2008.

“The intention is to move as quickly as possible,” El Mundo reported, citing informed sources.

El Mundo also said that the “cost of stabilising this bank could total around 2 billion euros. The Bank of Spain announced plans to immediately inject 550 million euros into Cajasur from the FROB Bank. The Bank of Spain has also appointed 3 administrators. A statement from the central bank advised depositors and creditors to “stay calm” as the bank will continue to operate normally under the new administration.

The beginning of the end? Spain’s banking collapse 1.0?

The collapse of the Spanish property market resulted in approximately 300 billion euros in bad debt. The Cajasur problem will only add fuel to the already escalating concerns over Spain’s economy which is suffering under the pressures of the worst recession in 60 years.

European markets are definitely set for more turmoil as eurozone red flags continue to emerge.