Guangdong Development Bank, a Chinese lender in which Citigroup Inc. has a 20% stake, said it will pursue an initial public offering to help finance its rapid expansion in the next few years.
The mid-size Chinese bank said in a statement Friday that it aims to float this year, and is studying details including size, timing and venue.
The bank joins domestic peers who have been raising funds from the stock markets in anticipation of strong business growth and stricter capital requirements.
Shareholders of Guangdong Development Bank "have reached consensus on accelerating the listing and establishing a solid capital-replenishment mechanism," Guangdong Development Bank President Michael Zink said in the statement.
A Citigroup-led consortium completed the purchase of 85% of Guangdong Development Bank for $3.06 billion in December 2006, capping a two-year battle among several groups, including consortiums led by France's Societe Generale S.A. and China's Ping An Insurance Co. China Life Insurance Co., State Grid Corp., and Citic Trust & Investment Co. each hold 20% stakes in Guangdong Development Bank, while International Business Machines Corp. holds a 4.74% stake.
Founded in 1988 and based in the southern metropolis of Guangzhou, Guangdong Development Bank has more than 500 outlets in China, many of which are based in the surrounding province of Guangdong.
The bank's chairman, Dong Jianyue, said in the statement Guangdong Development Bank will focus its outlet expansion in the next few years in the eastern Yangtze River Delta, near Shanghai, and in the northeastern area around the Bohai Sea.
Guangdong Development Bank reported a 22% rise in net profit for 2009, according to the statement, which didn't give a specific figure. As of the end of 2009, its assets totaled 666.5 billion yuan ($98 billion), almost double the level in 2006, the statement said.
