Four years ago, the Industrial and Commercial Bank of China (ICBC) required a bailout from the Chinese government. Shortly thereafter, three Western financial institutions—credit card company American Express, European insurance giant Allianz, and investment bank Goldman Sachs—took stakes in ICBC, exchanging their expertise, branding, and capital for shares, six months before the IPO on the Hong Kong exchange.

The contract required the three firms to hold 50% of their stake for six months, and the remainder for 36 months.

For Allianz and American Express, that second deadline passed on Tuesday. Although both sold half their stake at the first deadline’s passing, neither firm plans to complete the liquidation of their positions in ICBC, which is now the world’s largest bank by profit and market share.

Allianz owns 3.22 billion shares of ICBC, currently valued at AU $2.8 billion. The company reaped a profit of AU $1 billion from the six-month sale of half its stake in ICBC and could earn an additional AU $1.84 billion if it sold its second half now. Allianz, one of Europe’s largest insurance companies and headquartered in Munich, contributed risk and asset management expertise to the cooperative venture.

American Express owns 638 million shares, currently valued at AU $90 million. The company’s potential profit should it sell its remaining stake would be AU $368 million. American Express supplied its credit card branding to the mix.

Goldman Sachs renegotiated its contract with ICBC. Although it sold part of its stake in June 2009, it now must hold its remaining 80% until April of next year.

ICBC claims 190 million unique banking customers for its 16,000 locations within China and 112 international outlets. Stock market pundits forecast the bank’s FY 2009 profit to rise 16% to AU $20.3 billion—and has been consistently rated Buy to Outperform by those analysts.

Source: smh.com.au