New York-based Citigroup led a consortium buying 85.6 percent of Guangdong Development Bank for 24.267 billion yuan (3.06 billion dollars), a statement from the American bank said.

Citigroup, top life insurer China Life Insurance and China's State Grid Corp, a major Chinese electricity provider, will each take a 20 percent stake in the state-controlled Chinese lender, the statement said.

Chinese investment firm CITIC Trust will hold a 12.85 percent stake, Puhua, another mainland group, will take an eight percent share, while US computing services behemoth, IBM, will control 4.74 percent.

"This investment is a positive outcome for all stakeholders involved, including the Guangdong government, Guangdong Development Bank's management, employees, customers, shareholders and the new investors," said Robert Morse, chief of Citigroup's corporate and investment banking Asia Pacific division.

Under the agreement Citigroup, which beat a rival bid led by Societe Generale, will play a key management role as it attempts to improve Guangdong's weak governance standards, lending practices, and poor risk management.