China's largest mobile phone service provider became a strategic investor in a mid-sized bank based in Shanghai after a multi-billion dollar stock purchasing deal announced on March 10.

Guangdong Mobile, China Mobile's branch in Guangdong Province, bought 2.2 billion shares of Shanghai Pudong Development Bank at the cost of 39.8 billion yuan ($5.83 billion), claiming 20 percent of the bank and becoming its second largest shareholder.

Money from the state-controlled telecom operator will provide a sizable cushion to the bank's capital adequacy ratio at a time when the Chinese Government is encouraging the country's major banks to boost their capital in view of rapid loan growth, said Moody's Investors Service in a report.