Hang Seng Bank Ltd, a unit of HSBC Holdings, said it is selling a stake in China's Industrial Bank Co Ltd worth up to 16.8 billion yuan ($2.7 billion) to bolster its capital position and to fund expansion.

The sale of the up to 4.99 percent stake is the second chunk of Industrial Bank that the Hong Kong-based lender has put on the market this year, after it raised about $2 billion in February.

Hang Seng said in a statement that it would retain 0.88 percent of the Chinese bank on completion of the deal.

A sharp rise in Hong Kong shares has encouraged some financial investors to cash out their holdings, resulting in a wave of block deals in Hong Kong recently.

Hang Seng Bank, 62.14 percent-owned by HSBC, said it would sell 950.7 million shares of the Shanghai-listed lender at 17.68 yuan apiece, or a 5.96 percent discount to the previous close.

Goldman Sachs Gao Hua Securities Co Ltd and UBS Securities Co Ltd are the joint placing agents, it added.