Shanghai Pudong Development Bank(SPDB) is to strategically cooperate with Citibank in sole shareholding, credit card and technical support, the SPDB announced in a statement Thursday.
Citibank has invested 600 million yuan (US$72 million) to buy a five-percent stake in SPDB, becoming the first foreign shareholder of China's ninth largest commercial bank.
According to SPDB sources, the bank has signed several agreements of cooperation with Citibank Overseas Investment Cooperation.
Citibank said it would continue its investment in SPDB. Every Apr. 30 from 2006 to 2008, Citibank can buy SPDB shares from Shanghai State Assets Managing Co., Ltd and Shanghai's Jiushi Company and SPDB non-circulating shares, taking its stake in SPDB up to 24.9 percent.
The statement said SPDB would introduce Citibank's management, technology and staff to run its credit card business on the Chinese mainland. Citibank has promised to provide a credit loan to SPDB of up to 20 million US dollars.
The two banks will also establish a 50-50 joint venture company to manage the credit card business if the Chinese law allows.
Citibank said it would help SPDB to improve the Chinese bank's overall performance and profit to become a commercial bank in line with international standards.
SPDB will submit these documents to its annual general meeting of shareholders on Apr. 29 for evaluation.
Established in 1993, SPDB has branches across China and boasts total assets of more than 30 billion US dollars.
Citibank has four branches and two representative offices in China and its Shanghai Office was opened in 1902.
(Xinhua News Agency April 25, 2003)