Chinese banks are shunning investments in western banks because they hold doubts about their financial health, one of China’s most senior bankers has warned.
    Guo Shuqing, chairman of China Construction Bank, said Chinese banks also were being deterred by a lack of growth potential in developed markets
    “It’s very difficult at the moment because there are still so many uncertainties,” Mr Guo told the Financial Times in an interview on Monday. “We are not very interested on expanding our business in developed countries because the market is limited and growth potential is not there because of over-banking.”
    The warning came as Goldman Sachs prepared on Monday to sell up to $1.9bn worth of shares in Industrial and Commercial Bank of China, in the latest high-profile divestment of stock in a mainland lender.
    As recently as the beginning of last year, all of China’s largest state-controlled banks were looking to acquire stakes in western banks that would give them instant access to developed markets. But Chinese financial institutions have subsequently lost billions of dollars from poorly timed investments in western companies.
    CCB, now the second-largest bank in the world by market capitalisation, had been interested in investing in Standard Chartered, according to people familiar with the situation, but Mr Guo denied the bank would now consider such an investment.
    Mr Guo said Bank of America has assured him that it wanted to remain CCB’s second-largest shareholder, after the Chinese government.
    “[BofA] earns a lot of money because we give them a big dividend,” he said. “The experience has been different from bank to bank but in general it was a correct choice we made in banking reform by introducing investors and international leading banks – at least they were leading banks at that time – to be involved in our restructuring and reform.”
    BofA still owns about 11 per cent of CCB and cannot sell the bulk of that until August 2011.
    Goldman Sachs is in advanced talks with institutional investors to sell up to 3.03bn Hong Kong-listed shares in ICBC, the world’s biggest bank by market capitalisation and deposits, according to people familiar with the matter.
    Goldman has offered the shares – about a fifth of its overall holding – at between HK$4.80 and HK$4.90 each, and expects to close the sale on Monday afternoon New York time.
    The sale price represents a 4-6 per cent discount to Monday’s closing price of HK$5.11 a share. Goldman, the sole bookrunner on the deal, declined to comment.
    The stake sale will leave Goldman with a 4 per cent holding in ICBC, which it will retain until at least April 2010.