UPDATE: AIG To Sell Hong Kong Consumer Finance Unit To Chinese Bank

American International Group Inc. (AIG) said Wednesday it will sell its Hong Kong consumer finance unit to China Construction Bank (Asia) Ltd. for US$70 million.

This is the latest effort by AIG to repay the U.S. government after it received a $152 billion bailout, and the transaction will likely help China Construction Bank consolidate its footing in Hong Kong.

Officials at China Construction Bank Corp. (0939.HK), the parent of China Construction Bank (Asia), weren't immediately available for comment.

AIG, once the world's largest insurer by assets, said in a statement the sale of AIG Finance (Hong Kong) Ltd. to China Construction Bank (Asia) will also involve repayment of loans and deposits totaling US$557 million.

China Construction Bank (Asia) is the wholly owned banking unit acquired from Bank of America Corp. in 2006.

AIG Finance is one of the largest credit card issuers in Hong Kong, with more than half a million customers as of June 30.

Deutsche Bank is advising AIG on the deal, which is subject to regulatory approval, said the U.S. insurer.

AIG is seeking to sell most operations, including some of its Asian holdings, to raise tens of billions to repay government loans.

-Rose Yu contributed to this story, Dow Jones Newswires; 8621 6120-1200; [e-mail]