China’s Guangdong Bank aims for IPO next year: source
SHANGHAI (Reuters) – China’s Guangdong Development Bank, controlled by Citigroup, is drafting plans for an initial public offering that will likely take place next year, a source familiar with the situation said.
The mid-sized lender had yet to determine the location and size of the offering, which could consist of mainland-listed A shares, Hong Kong-listed H shares or a combination of the two, the source said on Monday.
Guangdong Development Bank had no comment on the matter.
A Citigroup-led consortium bought control of Guangdong Development Bank in 2007 for $3.1 billion after a protracted bidding battle with French rival Societe Generale (SOGN.PA) and helped turned around the struggling lender.
Last year the bank posted a profit for a third consecutive year, clearing a hurdle for eligibility to list its shares on the mainland, and was eager to list as quickly as possible although plans were still at a preliminary stage, the source said.
Total assets doubled to 666.5 billion in 2009 from three years earlier, while net profit jumped 22 percent last year as loans rose at the same pace to 390.9 billion yuan, the official Xinhua News Agency reported on March 12, citing President Michael Zink, a former Citigroup executive.
Citigroup, with a 20 percent stake, holds de facto management control of Guangdong Development Bank. China Life, the country’s largest life insurer, also owns 20 percent of the lender, which is based in the southern Chinese province of Guangdong.
Chinese banks are tapping the capital markets for funds to replenish their capital after last year’s lending binge to support the government’s economic stimulus, and as Chinese regulators tighten capital rules to shore up bank balance sheets.
Citigroup also owns a minority stake in Shanghai Pudong Development Bank, which is raising about $5.8 billion by selling a 20 percent strategic stake to China Mobile.