France-based bank Groupe BPCE may acquire a 19.9% stake in Bank of Guangzhou Co, the Guangzhou Daily reported on Wednesday, citing unnamed sources with knowledge of the matter as saying.

According to the repot, Groupe BPCE has hired PriceWaterhouseCoppers to conduct a due diligence on the Chinese bank, and it is expected to sign the stake acquisition agreement in November.

Reportedly, Bank of Guangzhou, which is 90%-owned by Guangzhou Municipal Government, plans to sell a minority stake to meet the requirements for an initial public offering, which stipulate that local government's holdings in the listed bank shall not exceed 30%.

The sources also revealed that the small-sized Bank of Guangzhou, whose assets totaled RMB 130 billion, plans to list on the Shanghai Stock Exchange in three years, adding the bank aims to realize RMB 2 billion in net profit for 2010 and over RMB 5 billion within five years.

Groupe BPCE, which is merged by Banque Populaire and Caisse d'Epargne in 2009, is French second-largest lender in terms of assets, only next to BNP Paribas S.A.