I have solved the problem: 1) The mean of the dichotomous variable was not significantly different from 0 ie: I had 104,000 data points equal 0 (no default) but only 255 equal to 1 (default)
2) Taking a sample of no default banks fixed the problem.
3) Minimum required mean to avoid issue was 0.3 ie: around 1000 data points vs 255 data points.
4) Perfect separation also occurred when i split the data according to size and still inlcuded the variable size as a independent variable.
I hope this helps anyone struggling with logistic regressions. More often than not it is the data that has the problem. Test for outliers and take samples if my best suggestion.