China Life joins foreign group in bid for 85pc GDB stake

China Life Insurance has joined a Citigroup-led consortium to bid for an 85 per cent stake in Guangdong Development Bank (GDB), the mainland's 11th-largest commercial lender, sources said.

Although promising to fill the vacuum left after Beijing's refusal to lift the caps on foreign investment in banks, China Life's entry will face regulatory hurdles in a market just starting to toy with the idea of multi-role financial firms.

China's dominant life insurer, listed in Hong Kong and New York, might use its parent firm as the investment vehicle, sources said.

It is not known whether China Life will take over the 25 per cent stake relinquished by the consortium's two foreign members that may be worth seven billion yuan.

A Citigroup spokesman in Hong Kong declined to comment.

The Citigroup-led consortium in December last year submitted the 24.1 billion yuan winning bid for the GDB stake, trumping a 23.5 billion yuan bid from a consortium led by French rival Societe Generale and the 22.6 billion yuan pitched by Ping An Insurance, China's second-largest life insurer.

The earlier proposal envisaged Citigroup and United States buyout firm Carlyle Group respectively owning 40 per cent and 9.9 per cent of the bank directly, with state-owned firms China Energy Conservation Investment, China Potevio, and China National Cereals, Oil and Foodstuffs Corp taking up the remainder.