Citigroup, an American multinational investment banking and financial services corporation, has sold its 20 percent stake in China Guangfa Bank for US$3 billion, joining a list of western banks that have pulled out from investments in China's banking sector.

Citigroup sold its stake in Guangfa Bank to China Life Insurance Co, the country's biggest life insurance company by premiums. The New York-headquartered bank acquired the 20 percent stake in 2006 for US$620 million.

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The deal, which followed an aborted bid to float Guangfa Bank on the stock market, would allow Citi to focus on expanding through its own network in China that extends across 13 cities.

"This transaction is consistent with the simplification of Citi and allows us to focus on our resources in China on growing our core franchise further. China remains one of our highest priority markets around the world," said Francisco Aristeguieta, head of Citi's Asia-Pacific unit.

Citi's revenue for China last year totaled more than US$1 billion, a double-digit percentage growth from the previous year. The US bank said the sale, which is expected to close in the second half of this year, will not have a material impact on Citigroup's forthcoming earnings report in April.

In a statement to the Hong Kong stock exchange, China Life has confirmed the acquisition and said the 20 percent stake that it will acquire from Citi will boost its holding in Guangfa Bank to 43.7 percent.

The Chinese insurer also announced that it would acquire about 568 million shares of Guangfa Bank from International Business Machines Corp for US$554 million.

China Life said it has agreed to buy 3.65 billion shares of China Guangfa from Citigroup Inc and IBM Credit LLC in an effort to boost its financial-services business.

Established in 1988 as Guangdong Development Bank, China Guangfa Bank is a commercial banking corporation headquartered in Guangzhou.

TagsCitigroup, Citi, Guangfa Bank, China Life Insurance