BANCO Bilbao Vizcaya Argentaria SA said yesterday it will pay 800 million euros (US$1.23 billion) to double its stake in China Citic Bank Corp and raised its holding in Citic International Financial Holdings Ltd, controlled by the Citic Group, from 15 percent to about 30 percent.

BBVA, Spain's second-biggest bank, will hold a 10.07-percent stake in Citic Bank after the deal and will be able to nominate three members to the board of CIFH and two members to Citic Bank's board.

The Spanish bank said in an e-mailed statement yesterday that it also holds a two-year call option for an additional 5-percent stake in Citic Bank which, if exercised, would enable it to increase its stake in the Chinese bank to 15 percent. But the deal is dependent on the delisting of CIFH.

"This transaction places BBVA in an unbeatable position to leverage the tremendous growth potential inherent in the Chinese banking business, creating value for its shareholders in a deal that is accretive from the outset," the bank said yesterday.

BBVA is making progress on its Asian growth strategy, particularly in China - one of the fastest-growing financial services markets in the world.

BBVA in November agreed to pay a total of 989 million euros for stakes in the two banks under China's biggest investment firm, Citic Group.

The move propelled BBVA to be the first Spanish bank with a significant presence in China's retail banking sector.

Foreign banks are buying stakes in domestic banks as a short cut to expand in the world's fastest growing major economy.

Some overseas banks like HSBC and Citigroup have a two-throng expansion strategy in China - organic growth and acquisition of Chinese banks. But they are restricted to a combined 25-percent stake in Chinese banks, or at most a single holding of 19.99 percent.