Goldman Sachs is close to offloading about a fifth of its stake in Industrial and Commercial Bank of China (ICBC) for up to $1.9 billion (£1.2 billion) as it moves to repay a bumper debt to the American taxpayer.

According to people familiar with the situation, Goldman is in advanced talks to sell just over three billion shares in ICBC, listed in Hong Kong, for up to HK$4.90 each.

Goldman will sell part of its shareholding in the world's biggest bank by market value to institutional investors. It is expected to complete the sale later today.

Goldman Sachs declined to comment.

The bank bought a 4.9 per cent stake in ICBC in 2006 as Western banks piled in to China, hoping to capitalise on its booming economy and the liberalising attitude of the country's government.

Today's sale, which when completed will leave Goldman with a 4 per cent holding, marks the latest example of some of those same buyers dumping their stakes to shore up their capital positions.

Allianz and American Express, which bought ICBC shares at the same time as Goldman, have already sold their stakes. UBS and Royal Bank of Scotland have sold their shareholdings in Bank of China.

Selling the shares will help Goldman Sachs pay off its $10 billion loan from the US Government. Like its Wall Street peers, it is keen to repay the debt as swiftly as possible.

It commited in March to retain 80 per cent of its holding in ICBC, or about 4 per cent, for at least a further 12 months.

The HK$4.8 to HK$4.9 price range for the shares represents a discount of between 4 per cent and 6 per cent to the bank's closing share price in Hong Kong today of HK$5.11.

Goldman is handling the share sale itself.

It has boosted its return on the ICBC holding by delaying the sale. Shares in the bank have rebounded sharply in the weeks since Goldman said that it would retain some shares in order to demonstrate its commitment to ICBC.

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