By Jesús Aguado

MADRID (Reuters) - Spain's second largest bank BBVA is planning to extend its digital banking services to Germany as it seeks to boost customer numbers and mirror its success in Italy, the bank's country manager in Spain said on Wednesday.

BBVA, which recently submitted a hostile 12.28 billion euro ($13.20 billion) takeover offer for Sabadell, has invested heavily in digital banking services and like larger Spanish rival Santander, has been expanding in emerging economies, such as Mexico, when it struggled in the past to boost income in mature markets.

In October 2021, BBVA entered the consumer lending market in Italy by offering free online accounts to take advantage of a shift to digital banking there during the pandemic.

It had reached 500,000 customers by the beginning of June in Italy, two and a half years ahead of its plan, Peio Belausteguigoitia said at a financial event in Santander.

The bank now aims now to reach 600,000 clients by the end of 2024.

"Logically we are replicating the successful model we have had in Italy in the German market (...) where we hope to have a digital bank by 2025," Belausteguigoitia said.

The bank is also currently in the process of selling 300 idle branches in Spain as part of its digital shift, Belausteguigoitia added.

One of the reasons BBVA wants Sabadell is for the smaller lender's significant market position in small and mid-sized lending in Spain, where BBVA now aims to add 80,000 new SME clients in 2024, the BBVA executive said.

The bid, which is opposed by the Spanish government, was rejected by Sabadell's board, prompting BBVA to launch a hostile offer directly to Sabadell's shareholders.

Belausteguigoitia said BBVA's potential presence in the UK through TSB, Sabadell's British high street bank, would be "compatible" with its part ownership of Atom Bank, the UK's first app based lender.

The market has been speculating about whether it would want to keep or sell TSB if the bid succeeded.

BBVA, which had set itself a minimum approval threshold of 50.01% of Sabadell shares, has said that the regulatory process could take six to eight months, before formally going to shareholders.

BBVA was "confident" of getting all the approvals for its bid and was working with all the regulatory authorities, the country manager said, adding that the bank would focus on organic growth in Spain if its bid was unsuccessful.

The bank has called an extraordinary shareholder meeting on July 5 to approve a share issue to fund the bid.

The BBVA manager said the three-week proxy voting process started last week and so far voting rates had been normal and positive.

($1 = 0.9305 euros)

(Reporting by Jesús Aguado; editing by Inti Landauro and Elaine Hardcastle)