Guangdong Development Bank

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Guangdong Development Bank (Simplified Chinese: 广东发展银行; Traditional Chinese: 廣東發展銀行; pinyin: Guǎngdōng Fāzhǎn Yínháng, abbreviated: 广发行) is a bank based in Guangzhou, Guangdong, People's Republic of China. As was announced in December 2005, Guangdong Development Bank is going to be the first public bank in China which is going to be acquired by a foreign bank.

The bank was founded in 1988.

Ater a year of battling, a joint bid group led by Citigroup, IBM and China Life (China Life Insurance Company) won the bid at mid November of 2006 over two other bid groups led by Societe Generale and Ping An. Citigroup assumed that the initial bid be 40% share but then sought alternatives to abide by the Chinese Law on Foreign share of domestic banks. Citigrup had to form a joint bid with several other firms, such as China Life, to satisfy the requirement. The turnout was Citibank could get 20% of the share and took managerial control.

Guangdong Development Bank is a mid-size national bank with more than 500 branches in China. Based in the booming Guangdong province bordering Hong Kong, GDB has assets of $47.9 billion, 12 million consumer customers, 9 million bank cardholders, 16,000 small and medium-sized business customers and 12,474 employees. Its problems seem to lie in weak capitalization and a history of bad loans.

Citigroup will have 20% stake, while IBM will hold 4.74%, keeping the two American companies below the 25% threshold for overall foreign ownership. China Life and State Grid will each own 20%, CITIC Trust, 12.85% and Puhua will hold the remaining 8% of the equity being sold.

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[edit] References
  • [1] retrieved at 11Am,Dec 1st, 2006.
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