Buying rights to keep bank stakes
By Maggie Zhang |
December 4, 2010, Saturday
|
Print Edition
Print Edition
CITIGROUP Inc and China Life Insurance have fully participated in the 15 billion yuan (US$2.2 billion) rights issue of Guangdong Development Bank as they maintained their leading stakes in the Chinese lender.
China Life invested 3 billion yuan in the Guangdong Bank to maintain its 20 percent stake while Citigroup also kept its holding at that same level by buying newly-issued shares, the insurer said in a filing to the Shanghai Stock Exchange yesterday.
The move would "increase our overall investment returns, improve our asset-liability structure and help maintain our interest in the bank," said Beijing-based China Life, the world's biggest life insurer by market value.
The bank, once saddled with bad loans, returned to the black in 2007 after the Citigroup-led consortium steered it onto a growth path. Net profit grew 22 percent to 3.4 billion yuan in 2009. Outstanding loans rose 22 percent on an annual basis last year to 380.9 billion yuan.
The bank, which sold controlling stakes to Citigroup, China Life and several other strategic investors in a restructuring in 2006, is preparing for an initial public offering as soon as next year.
China Life invested 3 billion yuan in the Guangdong Bank to maintain its 20 percent stake while Citigroup also kept its holding at that same level by buying newly-issued shares, the insurer said in a filing to the Shanghai Stock Exchange yesterday.
The move would "increase our overall investment returns, improve our asset-liability structure and help maintain our interest in the bank," said Beijing-based China Life, the world's biggest life insurer by market value.
The bank, once saddled with bad loans, returned to the black in 2007 after the Citigroup-led consortium steered it onto a growth path. Net profit grew 22 percent to 3.4 billion yuan in 2009. Outstanding loans rose 22 percent on an annual basis last year to 380.9 billion yuan.
The bank, which sold controlling stakes to Citigroup, China Life and several other strategic investors in a restructuring in 2006, is preparing for an initial public offering as soon as next year.
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