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Goldman Sachs Group Inc is seeking to sell a $1 billion stake in Industrial & Commercial Bank of China Ltd after the share prices of the world's biggest lender by market value rebounded almost 50 percent from last year's low.
The shares are being offered at HK$5.77 (75 US cents) each, 3 percent lower than the lender's HK$5.95 closing price in Hong Kong on Monday, according to a term sheet obtained by Bloomberg News. The document does not indicate the number of shares offered.
Investing in local lenders in China is reaping bigger profits for foreign banks than operating their own franchises in the world's second-largest banking market. The Western firms' gains on those stakes are set to exceed their investments, with more than $20 billion in holdings remaining even after they recouped about $24 billion.
The Wall Street firm is selling down an investment first made in January 2006 when New York-based Goldman Sachs and client funds it manages agreed to invest $2.58 billion in Beijing-based ICBC. The bank and the funds have offloaded ICBC shares at least four times before Monday's effort, data compiled by Bloomberg show.
ICBC has gained more than 8 percent so far this year and about 15 percent since Goldman Sachs' private equity funds sold a $2.5 billion stake in April to Singapore's Temasek Holdings Pte. The bank and its funds have divested at least $7.76 billion worth of ICBC shares in four sales since June 2009, data compiled by Bloomberg show.
Connie Ling, a Hong Kong-based spokeswoman for Goldman Sachs, declined to comment on the stake sale.
Global banks and financial institutions, including Temasek, Bank of America Corp and Citigroup Inc, invested a combined $33 billion in Chinese banks from 2001 to 2009, according to data compiled by the China Banking Regulatory Commission.
Their profits from selling down those stakes overshadow the $10 billion that global banks have jointly earned over the past decade from their own franchises in China, the regulator's data show.
(China Daily 01/29/2013 page13)