MADRID French bank Credit Agricole (CAGR.PA) said on Thursday the Bank of Spain has allowed it to raise its stake in Bankinter (BKT.MC), Spain's sixth largest bank, to 29.9 percent.
Bankinter stock surged 5.8 percent to 10.04 euros at 1635 GMT.
Bankinter is at the center of a power play between Credit Agricole, which bought an almost 20 percent stake in November, and long-time investor Jaime Botin, who owns 16 percent and has also asked the Bank of Spain for permission to raise his stake to 30 percent.
The central bank has not yet made an announcement about Botin's stake.
"This transaction is in line with Credit Agricole's strategy to strenghten its presence in the European banking market and in particular in the Spanish market," Credit Agricole said in a statement.
Bankinter said last month its 2007 net profit fell short of forecasts as funding and operating costs rose. The bank also said it was confident about the year ahead despite problems in the market and the economy.