Spain's BBVA buys 29.5 pct stake in Atom for 45 mln pounds

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MADRID, Nov 24 (Reuters) - Spain's BBVA (Amsterdam: BA6.AS - news) has bought a 29.5 pct stake in aspiring online lender Atom for 45 million pounds ($68.2 million), marking its first foray into British digital banking in a bid to boost its mobile presence.

The investment in the startup lender, which is expected to launch in 2016, is part of BBVA's strategy to expand in digital banking and is the latest example of Spanish interest in Britain's banking sector after rival Sabadell's takeover of TSB earlier this year.

"BBVA believes the digital market in the UK offers excellent growth opportunities and that digital banks that put the customer first are the future," BBVA's Chairman Francisco Gonzalez said in a statement.

BBVA has made a number of moves to boost its digital profile in the last few years, including the buyouts of Oregon-based Simple (LSE: 0LYN.L - news) in 2014 and San Francisco-based Spring Studio in April (LSE: 0N69.L - news) .

Atom was the first mobile-only bank to be granted a licence by the UK's Prudential Regulation Authority last June, following the formation of a slew of so-called 'challenger' banks with ambitions to improve competition in Britain's banking sector.

Chairman Anthony Thomson said the company had now raised more than 135 million pounds in the 18 months since its inception, reflecting confidence in its business model and rising interest in digitally focused financial services firms.

Atom said its closely-guarded mobile banking application, which it believes will challenge the dominance of Britain's biggest banks including HSBC, Lloyds and Barclays (LSE: BARC.L - news) , was in "live trial" and would move shortly to an invitation-only release before a public launch early in 2016.

BBVA will hold two seats on Atom's board following the capital injection, which will be used to accelerate growth of the British company's business, BBVA said.

BBVA's expansion into Britain reflects a push by Spanish lenders to increase revenues from international operations against a backdrop of record low interest rates and increased competition for lending in their home market, which have crushed lending margins and hurt earnings across the sector.

Spain's largest bank Santander moved into the UK in 2004 with the acquisition of Abbey National and later bought Alliance & Leicester and Bradford & Bingley making it one of the biggest mortgage lenders in the country.

Sabadell followed up its takeover of TSB with the purchase of mortgage assets from state-rescued lender Northern Rock for 3.3 billion pounds on Nov 13. ($1 = 0.6601 pounds) (Reporting by Paul Day and Sinead Cruise; Editing by Jose Elias Rodriguez and Adrian Croft)