UPDATE 1-Bangkok Bank set to sell ACL stake to ICBC

* Bangkok Bank to sell 19 pct stake to ICBC, newspaper says

* Deal not yet completed, Finance Ministry approval needed (Adds Bangkok Bank comment paragraphs 6-7, analyst comment)

BANGKOK, June 30 (Reuters) - Bangkok Bank BBL.BK, Thailand's biggest lender, has agreed to sell a 19 percent stake in ACL Bank ACL.BK to Industrial and Commercial Bank of China (ICBC), the Bangkok Post reported on Tuesday.

At 0343 GMT on Tuesday, ACL shares were up 3.42 percent at 6.05 baht and Bangkok Bank shares were up 1.87 percent, while the main index was 1.02 percent higher.

ACL shares had surged 11 percent on Monday after fresh reports that ICBC (1398.HK) (601398.SS) was interested in investing in the bank and wanted the Thai government to support a stake purchase.

Kosit Panpiemras, executive chairman of Bangkok Bank, said talks between his bank and ICBC had been completed, the Bangkok Post reported.

"Now it's up to the Finance Ministry. We have to wait for government approval as (ICBC) is seeking a larger stake in ACL, and wants to launch a tender offer for other shares," Kosit was quoted as saying.

A Bangkok Bank executive said a provisional agreement had been reached.

"We have a preliminary agreement with ICBC, but I can't confirm the talks are already completed," Executive Vice President Kulathida Sivayathorn said.

"We want the deal to end soon, but it has to wait for the government's decision ... We don't want to put pressure on the government," she said.

ACL is owned 30.6 percent by the Finance Ministry. ICBC has been in talks about buying a 49 percent stake from existing shareholders of the small Thai bank since October 2007, but the global financial crisis intervened and delayed an agreement.

KGI Securities said in a note to clients Bangkok Bank might book pretax profits from the stake sale of more than 2 billion baht if the deal is done at about 1.5 times ACL's book value of 8.00 baht per share at the end of March.

ACL is the smallest Thai lender with assets of 62.3 billion baht ($1.8 billion). At its current share price, it has a market capitalisation of $271 million. ($1=34.02 Baht) (Reporting by Orathai Sriring and Arada Therdthammmakun; Editing by Alan Raybould)