SPANISH bank BBVA has agreed to sell a 4.9 percent stake in China Citic Bank to property developer Xinhu Zhongbao for HK$13.136 billion (US$1.69 billion) as it looks to bolster its capital base.

    BBVA said Friday it would book net capital gains of around 400 million euros (US$450 million) and strengthen it core capital ratio by 20 basis points after the sale, which is expected to be finalized in the first quarter.

    BBVA had a core capital ratio of 10.1 percent under the so-called Basel III fully-loaded criteria at the end of September and has committed to keep this ratio at around 10 percent.

    While the lender had excess capital of more than 13 billion euros under an European Central Bank health check last year, tougher global rules on capital ratios and their ownership of financial institutions have forced BBVA and others to set aside more cash or sell holdings in foreign lenders.

    BBVA, which had already cut its Citic Bank stake in 2013 by selling a 5.1 percent chunk to State-owned parent CITIC Ltd., said it would retain a 4.7 percent stake in the Chinese bank.

    BBVA said Friday it would first sell the China Citic stake to UBS AG. UBS’ London branch will then transfer the stake to Xinhu Zhongbao. BBVA said it expects the deal to be closed in the first quarter of this year. (SD-Agencies)