As Industrial and Commercial Bank of China Ltd. reported a 36% rise in 2008 net profit, foreign investors indicated they are looking to sell part or all of their stakes in the bank, the world's largest by market value.
American Express Co. said it may sell its stake in ICBC this year, and Goldman Sachs Group Inc. said it would not sell down 80% of its roughly $6 billion stake in ICBC before April 2010 but indicated it may soon sell 20% of its 4.9% holding in ICBC.
The two companies' remarks came as the foreign investors that bought into China's banking industry several years ago have shored up capital by taking profits on gains in their holdings.
Goldman Sachs and American Express, along with Dresdner Bank Luxembourg SA, bought into ICBC in early 2006 before the Chinese lender's $21.9 billion dual listing in Hong Kong and Shanghai the subsequent October. In an agreement at that time, the three investors can sell up to half of their holdings of ICBC in April and the remander in October.
Goldman Sachs vice chairman J. Michael Evans told reporters in Hong Kong that the U.S. bank decided on the stake lockup extension because "we have great confidence in China's economy and in ICBC's management."
"We are in no hurry to sell, as we don't need the cash," he said.
The fallout from the U.S. subprime implosion has not hit Goldman Sachs as hard as its competitors, but its investment banking revenue has declined as the ensuing financial crisis slowed business activity and forced it to convert to a bank holding company.
Concerns about stake sales by ICBC's strategic investors have put pressure on its stock after several foreign banking companies in recent months divested their investments in state-run Chinese lenders. The sellers included Bank of America Corp., which sold part of its stake in China Construction Bank Corp., and Royal Bank of Scotland Group PLC and UBS AG, which each sold its entire stake in Bank of China Ltd.
To alleviate the concerns ICBC's strategic investors promised they will opt for private placements if they dispose of their stakes.
Apart from pressure on interest margins, ICBC and its smaller rivals are also facing slower growth in fee income as China's uncertain economic outlook hits equities.
