Carlos Torres, BBVA's chairman, told shareholders on Friday that he was fully confident of the success of its €12 billion takeover bid for smaller competitor Sabadell.

The bid, opposed by the Spanish government, was rejected by Sabadell's board, prompting BBVA to launch a hostile bid directly to Sabadell shareholders in May in its latest attempt to reach a deal, following failure in 2020.

"We have full confidence in the success of the transaction," Torres told shareholders in Bilbao, where Spain's second-largest financial institution by market value was holding an extraordinary meeting to approve an issue of up to 1.126 billion shares to finance the deal.

More than 70% of BBVA's capital was present or represented at the shareholders' meeting, said board secretary Domingo Armengol.

"The proposed transaction increases our scale and also reinforces our positioning in Spain, an attractive market to invest in," Torres said.

(Reporting by Jesús Aguado; editing by Emma Pinedo; Spanish editing by Javi West Larrañaga)