Monday, April 27, 2009

ICBC Says Allianz, American Express Sold Shares

Industrial & Commercial Bank of China Ltd., the world’s largest by market value, said Allianz SE and American Express Co. sold a combined $1.9 billion of shares as a lockup on their stakes in the Chinese lender ended today.

Allianz sold 3.216 billion Hong Kong-listed shares, or half of its stake, while American Express sold 638 million shares, Beijing-based ICBC said in e-mailed statements, without providing pricing details. The sales, to private investors, were made at HK$3.86 apiece, a 4 percent discount to yesterday’s closing price, according to two people familiar with the transactions who declined to be identified.

American and European banks, crippled by losses from the global credit crisis, are paring holdings in Chinese banks as the three-year lockup on their investments ends, and after a 32 percent gain this year in the nation’s Shanghai Composite Index. Royal Bank of Scotland Group Plc., Bank of America Corp. and UBS AG have cut holdings in Chinese lenders.

“This is good news to a large extent as it removes the overhang on the shares,” said Sheng Nan, a Shanghai-based analyst at UOB Kayhian Investment Co. “The fact that they can close a deal with investors so fast implies that there’s strong demand and confidence for Chinese banking shares.”

Shares of ICBC, the world’s third most valuable company, fell 1.5 percent this year to yesterday in Hong Kong on anticipation about a potential sale by investors, making it the second-worst performer among the nation’s six publicly traded lenders in that market. ICBC’s Hong Kong shares surged 7 percent at 9:58 a.m. in pre-market trading to HK$4.30.

Goldman Stake

Goldman Sachs Group Inc. last month agreed to keep 80 percent of its almost 16.5 billion shares for at least another year, easing concerns about added supply of stock.

ICBC said yesterday first-quarter profit increased 6.2 percent to 35.15 billion yuan ($5.15 billion) on record credit growth and lower provisions for non-performing loans. Chairman Jiang Jianqing, who has more than doubled ICBC’s profit during the past three years, seized on China’s stimulus package to dole out loans for construction projects.

RBS and UBS sold their stakes in Bank of China Ltd. in January after lockup agreements expired, and Bank of America reduced its stake in China Construction Bank Corp., raising funds to repair balance sheets savaged by writedowns on toxic securities.