China's banking regulator played down a media report which claimed it would allow Citigroup to secure a 36 per cent share in Guangdong Development Bank (GDB).

According to the Shanghai-based Oriental Morning Post, the China Banking Regulatory Commission (CBRC) had approved Citigroup's bid for the stake in GDB, following a lengthy battle with French lender Societe Generale and China's second-largest insurer Ping An Group.

However, the CBRC stipulates that a single foreign bank cannot hold a stake of more than 20 per cent in a Chinese lender, while there is a 25 per cent cap on all foreign holdings in Chinese lenders.

"It is not likely for the regulator to break the ceiling and create an uneven playing field for other foreign banks," an unnamed CBRC official told China Daily, adding that the commission had yet to decide on the issue.

When a subsidiary of Citigroup joined the consortium after the Carlyle Group withdrew from the bidding in September, the CBRC suggested Citigroup lower its planned stake or transfer ownership of its subsidiary company to other partners, said the official.

Responding to the paper's claims, Marc Poirier, Societe Generale country manager for China, said: "I don't think that is true," adding the bidding is still ongoing.

Citigroup declined to comment on the paper's report.

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