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Citi in historic deal with Shanghai Pudong

Citi in historic deal with Shanghai Pudong

(China) – Citigroup banking unit Citicorp is set to raise its stake in Chinese affiliate Shanghai Pudong Development Bank to 24.9 percent by 2008, giving it the opportunity to become the first foreign bank to own more than 20 percent of a Chinese lender. The investment may not stop at 24.9 percent either, with reports out of China that Shanghai Pudong – one of four domestic banks listed on Chinese stock markets – will next ask its shareholders to allow Citibank to assume control after 2008.

Citi already holds 4.6 percent of Shanghai Pudong, purchased for US$72 million.

Other foreign banks with significant stakes in Chinese banks include HSBC, which holds 8 percent of the Bank of Shanghai, while US buyout firm Newbridge Capital is in talks to take a 20 percent stake in Shenzhen Development Bank.

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