A group of investors led by Citigroup has won the right to buy a controlling stake in a Chinese state-owned bank, the Guangdong Development Bank.

Citigroup and its partners appear to have beaten out a group of investors led by the French banking giant Société Générale, which was also bidding to acquire a stake. The stake of the Citigroup consortium would be limited.

China's banking regulator restricts any single foreign investor to a 20 percent holding, with all foreign holdings in any Chinese lending institutions limited to 25 percent. An agreement is yet to be signed.

If the deal goes through, it would end a nearly yearlong battle to win control of Guangdong Development Bank, a long-troubled medium-size lender based in Guangdong Province of southern China. A deal would also be the first time a foreign-led group had gained control of a state-owned bank.

Citigroup itself would probably control just short of 20 percent of Guangdong Development, which has about $40 billion in assets. It is unclear what shares its partners would hold.

Citigroup had originally sought to control 40 percent to 50 percent itself, with its consortium bidding $3 billion for 85 percent of the bank. Such a large holding would have allowed Citigroup to install its own management and run its own operation in China. And the bank was close to announcing such a deal last December.

But intense debate over foreign investment in Chinese banks, along with pressure from other foreign investors that were also seeking to control Guangdong Development, led to another round of bidding and negotiations. In May, the Chinese
regulator imposed new rules that restricted foreign ownership in lending institutions.

According to people close to the deal, Citigroup has teamed up with several huge state-owned Chinese companies, including the China Life Group, an insurance company, and the State Grid, a national power company. Over the last two years, three big state-owned banks went public in some of the world's largest initial stock offerings, raising more than $40 billion.

Leading financial institutions, including Bank of America, Goldman Sachs, American Express, the Royal Bank of Scotland and UBS, have invested billions of dollars in China's state-owned banks.

Citigroup also owns a 19.9 percent stake in another Chinese bank, the Pudong Development Bank in Shanghai. Guangdong Development has been considered one of the Chinese banks in greatest difficulty, and while it is situated in a rich province, banks in the region are widely seen as mismanaged.

Source:佚名