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Citigroup's Guangdong bank deal approved

A Citigroup-led consortium finally got the stamp of approval for a US$3.1 billion deal for control of Guangdong Development Bank (GDB), Reuters reported. The China Banking Regulatory Commission announced the approval of the deal Monday, formally ending a year-and-a-half battle between Citigroup and Societe Generale of France. Citigroup, China Life Insurance and China's State Grid will take a 20% stake each in the bank. IBM, CITIC Investments and Puhua Investment will take smaller stakes. Now the group has to clean up the troubled bank. GDB's president left last week to head China Merchants Bank. GDB also had some US$6 billion in bad loans at the end of 2005, sources said.

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