China Guangfa Bank, the provincial bank in which Citigroup (C.NYSE, 8710.TYO) has a 20% stake, intends to raise up to US$5 billion from dual Hong Kong-Shanghai listings either this year or early 2012, the Wall Street Journal reported. The initial public offering would mark a substantial profit for the US bank in China. Citigroup doesn’t plan to cut its stake during the IPO, said people familiar with the matter. Guangfa’s chairman Dong Jianyue has said that the Guangdong-headquartered bank will raise funds to finance expansion in the eastern Yangtze River Delta, near Shanghai, and in the northeastern area around the Bohai Sea. The IPO plans come as domestic peers raise funds from the stock and bond markets on expectations of strong business growth and stricter capital requirements.
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