Spain's BBVA to raise stake in China CITIC Bank to 15%: report

Nov. 23, 2009 (China Knowledge) - Banco Bilbao Vizcaya Argentaria SA, the second-largest bank in Spain, plans to further increase its stake in China CITIC Bank Corp<601998><0998>, the listed banking unit of the nation's largest investment conglomerate, to 15% from the previous 10%, sources reported.

The Spanish lender expects to earmark EUR 1.1 billion to buy a 5% stake in China CITIC Bank at HK$6.45 per share, according to the sources.

The move is in line with BBVA's strategy to consolidate its position as a leading foreign investor in China's banking industry.

Earlier this year, officials from China CITIC Bank and BBVA inked an agreement to expand their cooperation. The agreement mainly focuses on auto financing and private banking, according to an earlier report from China Knowledge.

In 2008, BBVA consented to increase its holdings in China CITIC bank from 4.83% to 10%. BBVA was also given an option to purchase another 5% in the bank.

BBVA is expected to exercise the option next week.