Dec. 31 (Bloomberg) -- UBS AG, Switzerland’s biggest bank, sold its stake in Bank of China Ltd. to raise cash as a three-year lockup period ended today.

Zurich-based UBS said in a statement that it sold 3.4 billion H-shares to professional investors. UBS earned a profit of approximately $400 million from the sale today, said a person familiar with the terms, who declined to be identified.

The bank “remains committed to its business relationship with Bank of China and to its business in China as a whole,” it said in the statement. “It’s a normal action” by UBS after the lock-up period expired, said Wang Zhaowen, Bank of China’s Beijing-based spokesman. The sale “shouldn’t affect the bank’s share price since all its operations are doing well.”

UBS, which was handed a $59.2 billion aid package by the Swiss government and central bank this year, said in October it would sell units and cut staff to focus on the securities and advisory businesses. The bank has slashed 9,000 jobs since the credit crunch started and posted almost $49 billion in losses and writedowns, more than any other European lender.

It agreed to sell its agricultural and Canadian energy- commodities units to JPMorgan Chase & Co. this month.

Bank of China fell in Hong Kong trading earlier on concern that Royal Bank of Scotland Group Plc and three other strategic investors, including UBS, might sell their stakes as the lockup ended. In 2005, UBS paid $500 million for 1.6 percent of Bank of China, the country’s third largest.

Royal Bank of Scotland is the second-largest shareholder in Bank of China with an 8.25 percent stake, while Temasek Holding Pte, UBS and Asian Development Bank hold a combined 5.7 percent in the Beijing-based lender. The investors, except for Temasek, are required to notify Bank of China of their disposal plans in advance and must maintain the “stability” of Bank of China’s shares, according to agreements with the lender.

To contact the reporter on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

Last Updated: December 31, 2008 05:42 EST