Citigroup seeks buyers for 20% stake in China Guangfa Bank after scrapping plans to list in Hong Kong

US banking giant Citigroup Inc. is looking for prospected buyers for its 20 percent share in China Guangfa Bank Co. after it disregarded its plans to list in Hong Kong, according to recent reports.

Bloomberg Business has reported that China Life Insurance Co., which is also an investor of Guangfa, is considering buying at least a part of Citigroup's stake.

Guangfa used to be known as Guangdong Development Bank Co., and it sold a total of 86 percent stake at $3.1 billion back in 2006. Citigroup led the consortium of firms that bought the shares.

According to The Wall Street Journal, that purchase deal with Guangfa was during the culmination of one of China's biggest and most fierce corporate takeover battles. According to reports, Citic Trust Co., which is also one of the investors of Guangfa, is also planning to buy Citigroup's minority stake in Guangfa.

Citigroup's 20 percent is valued at $620 million, but this figure is still based on its value in 2006. The present value of that 20 percent couldn't be determined yet.

In a report published by South China Morning Post, an analyst who has been following this issue said "Citi no longer needs Guangfa," especially that the bank's operations in mainland China has seen significant organic growth.

Guangfa Bank was planning to go public, but it was scrapped after China's stock market went on a downturn, affecting the global market.

It was aiming to raise $2 billion from the IPO. Guangfa's net income increased by 3.9 percent in 2014 to 12 billion Yuan, or $1.9 billion, following the 10 percent growth of the Chinese banking industry.

Meanwhile, Citigroup's China operations in 2014 saw an increase in profit by 66 percent to 1.6 billion Yuan. Citigroup only has 55 branches in China, while Guangfa has about 700. Now, Citigroup is in talks to sell it Guangfa Bank stake, according to reports.