As a result of the cooperation, Banco Bilbao Vizcaya Argentaria (BBVA) and Citic Group will become strategic partners in the development of retail and wholesale banking in mainland China and Hong Kong, one of the fastest growing markets in the world.
They will develop the banking operations via Beijing-based China Citic Bank, (CNCB), and/or Hong Kong-based Citic International Financial Holdings, (CIFH), Citic Group’s international arm.
CNCB and BBVA will cooperate in mainland China to develop products and services in banking and finance for private individuals and Chinese companies. BBVA and Citic Group will also develop a growth strategy for the entire Asia region through CIFH.
The agreement, part of the BBVA’s expansion plan in Asia announced in February, 2005, includes BBVA’s acquisition of 5% of CNCB for E501 million, with an option to increase to 9.9%, and a 15% stake in CIFH for E488 million.
BBVA’s total investment at this initial stage will be E989 million, the biggest outlay by a Spanish company in mainland China thus far. The combined assets of CNCB and CIFH come to E71.5 billion. Together they have more than 15,000 staff and 454 branches throughout mainland China and Hong Kong.
BBVA will have one director on CNCB’s board and two on CIFH’s.