BBVA said it has agreed to sell its near 30 percent stake in CIFH, an unlisted Hong Kong-based unit of China's CITIC Bank Corp, back to the listed parent for around 845 million euros (663.4 million pounds).

BBVA said the deal would generate 700 million euros in capital, although it will also hit profit by 25 million euros. Last year, BBVA had already cut its stake in CITIC to just under 10 percent, for a cash loss of up to 120 million euros.

Tougher global rules on banks' capital ratios and their ownership of financial institutions have forced BBVA and others to set aside more cash or sell holdings in foreign lenders.

Foreign banks, which are allowed to enter the country's banking system through partnerships with local lenders, have come up against a system that is showing signs of stress, with bad loans picking up as economic growth slows.

BBVA's profit in Eurasia, which combines its operations in China and Turkey, was up 13 percent in the January-September period from a year ago.

When BBVA cut the CITIC stake last year by selling a 5.1 percent chunk to state-owned parent CITIC Ltd, management had stressed an interest in keeping up the CITIC link. The bank declined to comment further on Tuesday.

BBVA shares were slightly down 0.2 percent at 0910 GMT, to 7.892 euros per share.

It said the sale would add 20 basis points to its "fully-loaded" core capital ratio. This tougher measure of capital stood at 10.1 percent at the end of September.

(Reporting by Sarah White and Robert Hetz, Editing by Jane Merriman and Louise Heavens)