UPDATE 1-Citi ups stake in Banco de Chile holding company

SANTIAGO, March 15 (Reuters) - Citigroup (C.N) agreed to pay $520 million to raise its stake in the group that controls Banco de Chile CHI.SN, the country's second-biggest bank, to 50 percent, a holding firm linked to the group said on Monday.

Citi bought the 8.52 percent stake in LQ Inversiones Financieras, an affiliate of the Luksic family's Quinenco firm. Citi had the option of buying up to 50 percent of LQ Inversiones Financieras after a 2007 asset merger deal. (Reporting by Antonio de la Jara; Editing by Gunna Dickson and Robert MacMillan)