Investors to cut stakes in China banks

Sales of Chinese bank shares by overseas investors are expected to accelerate this year as western financial institutions divest stakes to help bolster balance sheets. Over the past few weeks, UBS and RBS have sold their holdings in Bank of China, raising a combined $3.2bn, while Bank of America raised $2.8bn by selling a chunk of its stake in China Construction Bank. Sale of the stakes, acquired in 2005 and 2006, come as Bejing tries to support domestic banks amid the economic slowdown. The next wave could come late April when lock-ins expire on stakes in Industrial & Commercial Bank of China. Goldman Sachs’s 5% ICBC stake could fetch more than $7bn. Temasek, Allianz and HSBC also own lucrative stakes in Chinese banks.