American Express’s Ken Chenault plans to sell its stake in Chinese bank Industrial & Commercial Bank of China when a restriction on unloading shares in the Shanghai-based institution is lifted in three months.
According to sources who have spoken to officials at AmEx, a sale of its ICBC stake would give the giant credit-card provider an opportunity to raise much-needed cash at a time when financial institutions are bracing for choppy economic waters.
AmEx scooped up shares in ICBC in January 2006, along with other major financial institutions Goldman Sachs and French bank Allianz, totaling a combined 10 percent stake in one of China’s financial powerhouses. The companies were blocked from selling their stakes through a three-year lockup but can sell at least half of their shares April 28.
AmEx’s roughly 600 million shares in ICBC are expected to be worth about $500 million – at least double what it originally paid to grab a piece of the company, according to one banker familiar with the situation.
An AmEx spokeswoman declined to comment on “market speculation.”
Allianz also is expected to unload 3.2 billion shares in ICBC but it’s unclear if Goldman will follow suit, the banker said.
In recent weeks, a host of domestic and cash-strapped foreign entities have dumped billions of shares of Chinese banks onto the markets, causing concern among Chinese officials.
Bank of America shed its holdings in China Construction Bank for $2.8 billion two weeks ago, and was followed by Royal Bank of Scotland and Swiss bank UBS, which shed a combined $3.2 billion stake in Bank of China.