'We believe the increased stake of BoA highlights BoA's intentions to be a long-term and strategic investor in CCB,' a Mr Ning Ma, Hong Kong-based analyst with Goldman Sachs, said in a research note.

Before exercising the option BoA owned a 10.75 per cent stake in the Chinese bank.

The US group has yet to announce what it intends to do with an 8.2 per cent stake in CCB that it can now trade after a lock-up period on selling the shares expired.

'Bank of America intends to remain a long-term and significant strategic investor in CCB,' the it said in a statement.

Bank of America, which acquired the option from China SAFE Investments Limited (Huijin) in June 2005, said it expects the purchase will be completed by the end of Nov.

The shares being acquired under the option may not be sold until Aug 2011 without CCB's consent.

'In addition, both companies intend to further their mutual cooperation and other initiatives under the 2005 Strategic Assistance Agreement,' it said.

The 2005 deal marked the largest foreign investment in a Chinese bank at the time. -- AFP