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UPDATE 2-Criteria targets growth outside Spain with BEA deal

Published 06/22/2009, 09:17 AM

* Focusing on overseas growth vs mature domestic market

* Could raise BEA stake to 20 percent vs 9.8 percent

* Not planning further growth in Asia-Pacific outside BEA

(Adds background on BEA, analyst comment, Criteria share price, rejigs lead)

MADRID, June 22 (Reuters) - Spain's Criteria reinforced its strategy to grow outside its home market on Monday by announcing a deal with Bank of East Asia (BEA), which could lead to it hiking its stake in the Hong Kong-listed bank.

Criteria, which has already said it does not want to take part in any banking sector restructuring in Spain, has made BEA its strategic partner for the Asia-Pacific region, the bank said in a statement.

"Any expansion of a Spanish bank abroad should be taken positively ... overseas growth demonstrates that the sector in Spain is very mature and growth opportunities are exhausted," Renta 4 analyst Nuria Alverez said.

The agreement gives Spanish bank La Caixa's holding company the opportunity to raise its stake first to 12.5 percent and then, with BEA's agreement, to 20 percent from the 9.85 percent stake it currently holds.

Criteria has agreed only to sell its stake in BEA to a potential bidder for the bank if BEA's board approves the offer, a Criteria spokesman said.

The Spanish holding company has frequently said it wants to increase its stake in BEA, which is the largest independent local bank in Hong Kong with a market capitalisation of HK$45.7 billion, according to Thomson Reuters data.

Nevertheless Criteria has no immediate expansion plans for the Asia-Pacific region, the Criteria spokesman said, despite finding BEA's strong presence in China's main cities attractive.

"With Hong Kong and (Chinese) mainland companies aggressively seeking new markets, BEA's link-up with Criteria is considered very timely," Criteria said in a statement.

At 1250 GMT, Criteria shed 2.85 percent, underperforming a 2.19 percent fall in Spain's Ibex leading share index. (Reporting by Carlos Ruano and Jonathan Gleave; editing by Jon Loades-Carter)

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