Citigroup has won Chinese government approval for its purchase of a 4.62 per cent stake in Pudong Bank, according to the Chinese bank. The US financial services company will pay Yn600m to buy the stake in nontradable shares from Shanghai municipality and the purchase will make it the fourth largest shareholder in the bank.
The two partners plan to set up a credit card venture in China once regulations permit. Earlier this year, Citigroup signed an agreement allowing it to acquire further stakes between 2006 and 2008, up to a ceiling of 24.9 per cent.