Citigroup Said to Seek Buyers for 20% Stake in Guangfa Bank

  • China Life Insurance said to be considering offer for stake
  • Citigroup-led group bought 86% of Guangfa Bank in 2006

Citigroup Inc. is seeking buyers for its 20 percent stake in China Guangfa Bank Co. after the Chinese lender scrapped plans to list in Hong Kong, according to people with knowledge of the matter.

China Life Insurance Co., also an investor in Guangfa Bank, is considering an offer for at least part of Citigroup’s stake, one of the people said, asking not to be identified because the information is private. The Chinese lender formerly known as Guangdong Development Bank Co. sold a combined 86 percent stake to a consortium led by Citigroup in 2006 for $3.1 billion.

A planned initial public offering of Guangfa Bank was shelved after China’s stock-market rout roiled global markets, the people said. Hong Kong’s benchmark Hang Seng Index slumped 17 percent in the past six months. Guangfa Bank was aiming to raise about $2 billion in its Hong Kong IPO, people with knowledge of the transaction said in March 2014.

The bank’s net income rose 3.9 percent last year to 12 billion yuan ($1.9 billion), trailing the Chinese banking industry’s 10 percent overall growth. Citigroup’s China operations boosted profit by 66 percent to 1.6 billion yuan in 2014, according to the unit’s annual report.

Guangfa Bank has about 700 branches nationwide, compared with Citigroup’s 55.

Richard Tesvich, a Hong Kong-based spokesman for Citigroup, declined to comment. Calls to Guangfa Bank’s press officer weren’t answered. Lan Yuxi, a Beijing-based securities representative at China Life, didn’t immediately reply to an e-mail seeking comment.

The Wall Street Journal reported Thursday that Citigroup was in talks to sell its stake in Guangfa Bank.

— With assistance by Heng Xie, and Cathy Chan

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