Fitch Ratings said on Nov.17 it views the acquisition of management control of Guangdong Development Bank ("GDB") by a Citigroup-led consortium to be credit positive.

Citigroup's extensive experience in emerging markets and strong franchise should facilitate improved corporate governance, transparency, risk management, and commercialization.

However, Fitch noted that visible progress in GDB's weak financial profile will be necessary before the bank's current Individual 'E' rating can be upgraded. GDB has not published official financials since year-end 2004.

While a formal announcement on how GDB is to be restructured and the associated loss-sharing between the bank, the consortium, and the provincial and central governments has yet to be announced, Fitch states that speedy balance sheet cleansing will be a key in Citigroup's ability to move forward with its strategy in a timely fashion.

By People's Daily Online