Reuters) – Temasek Holdings added a sizeable China bank stake to its financial institutions portfolio, scooping up a 5.3 percent chunk of ICBC’s Hong Kong-listed shares from seller Goldman Sachs.
Temasek was burned by its financial industry exposure in 2008, hit by stakes in large European and U.S. banks that plunged in the crisis. But the state investor has kept nearly 40 percent of its investment portfolio in banks it feels are strong and are capturing emerging market growth.
Temasek agreed to buy $2.3 billion worth of H-shares in the Industrial and Commercial Bank of China, the world’s largest bank by market value. The purchase amounts to a 1.3 percent stake in ICBC, a Temasek spokesman said.
The Singapore state investor already owns stakes in China Construction Bank and Bank of China .
The deal for ICBC brings Temasek deeper into China’s banking industry, which has grown from insolvency six years ago to a sector that holds four of the world’s top ten banks by market value.
China’s banking industry, however, has also come under fire lately, as people and politicians have cried out that the sector’s massive profits are coming at the expense of citizens. Low deposit rates, coupled with steady customer fees are at the heart of the protests.
The total value of Goldman’s block sale was $2.5 billion, continuing with its plan to reduce its stake in ICBC, which it bought into prior to ICBC’s 2006 IPO. After the sale, Goldman will have roughly $3 billion of ICBC shares remaining.
Goldman sold the Hong Kong traded shares of ICBC at HK$5.05 each, or a 3.1 percent discount to Friday’s closing price. The other, roughly $200 million worth of shares were sold to other institutional investors, according to a source.
Temasek’s financial services portfolio includes stakes in Singapore’s DBS Group, Indian lender ICICI Bank and Standard Chartered .
Hong Kong shares of ICBC, which has a market value of $240 billion, were down 1.3 percent in early trading on Monday.
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