China Life Insurance, the nation's largest insurer, agreed to buy Citigroup's stake in China Guangfa Bank for $3 billion.

China Life will also acquire a 3.6 billion yuan stake from International Business Machines, it said in a Hong Kong exchange filing Monday. The purchases will boost China Life's holding in the lender to 43.7% from 20%, making it the single largest investor, according to the filing.

The sale follows Deutsche Bank's December agreement to sell its 20% stake in Huaxia Bank to PICC Property & Casualty as the German lender seeks to divest assets to help improve its financial strength. Lenders are discouraged from holding minority stakes in other banks under the more stringent capital requirements of the so-called Basel III regime.

The price values Guangfa Bank at about 1.01 times last year's book value, a person familiar with the matter said, asking not to be identified as the information is private.

Citigroup had been seeking a buyer for its 20% stake since at least October after the Chinese lender scrapped plans to list in Hong Kong, people with knowledge of the matter said earlier. The Chinese lender, formerly known as Guangdong Development Bank, sold a combined 86% stake to a consortium led by Citigroup in 2006 for $3.1 billion.

Richard Tesvich, a Hong Kong-based spokesman for Citigroup, declined to comment on the valuation of Guangfa Bank. Calls to China Life's Beijing-based press office went unanswered after regular business hours.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.