Goldman Sachs, the global investment banking and securities firm yesterday sold part of its stake worth around $2.25 billion in Industrial and Commercial Bank of China (ICBC), the world's largest bank by market value.
Goldman reduced its stake from 3.9 per cent to 3 per cent by selling 3.04 billion shares, more than the 2.75 billion it had originally planned to sell.
The New York-based banking giant had initially acquired a 4.9-per cent stake in China's most profitable bank in 2006 for $2.58 billion ahead of the bank's initial public offering, but yesterday's sale was made from the shares it had bought from ICBC's second offering.
Goldman had reduced its stake in June last year by selling around1 per cent of its 4.9 per cent stake in ICBC for $1.91 billion.
Goldman's sale comes after a lock-up period for the shares expired in April 2010 as well as the poor performance of ICBC that has led to its stock value declining by about 10 per cent since last year although the Hong Kong's benchmark Hang Seng Index has risen by about 2 per cent in the same period.
The sale also comes after China's banking regulator has asked all major Chinese banks to raise their Tier1 capital ratio, forcing nearly all banks in China to tap the stock market to raise capital including ICBC, which is expected to come up with a rights offering soon.