Bank of China Ltd. (3988.HK), one of China's Big Four state-run banks, said it is withdrawing from an auto-financing joint venture with Dongfeng Motor Group Co. (DNFGY) and Peugeot SA (PEUGY), only two years after launching the venture.

Bank of China's wholly owned unit BOC Insurance, which owns 50% of the venture, is selling its stake for CNY328 million (US$48 million), according to an auction statement posted on the Beijing Equity Exchange earlier this week.

"The potential buyer should be an auto manufacturer or auto sales company, or a non-banking financial company," said the statement.

Wang Zhaowen, a spokesman at Bank of China, said Friday further information on the sale, including the reason for the bank's withdrawal, isn't available at present.

Officials at Dongfeng and Peugeot weren't immediately available for comment.

In recent years, many global car makers such as General Motors Corp., Ford Motor Co. and Volkswagen AG have forged partnerships with Chinese banks to offer auto loans, to take advantage of the country's burgeoning auto-financing business.

Though China overtook the U.S. to become the world's largest light-vehicle market in the first quarter by sales, growth of auto financing has been slow because of China's undeveloped credit system and a cultural preference for using cash to make purchases.

At present, less than 10% of vehicle purchases in China are made with credit, in contrast to more than 70% in developed markets, analysts say.

BOC Insurance, Dongfeng Peugeot Citroen Automotive Co., and Peugeot launched the auto financing venture in August 2006.

The venture, with a registered capital of CNY500 million, mainly offers financing to dealers and to individual consumers. It reported a net profit of CNY14.55 million last year.

-Rose Yu contributed to this story, Dow Jones Newswires; 8621 6120-1200; rose.yu@dowjones.com

(Patricia Jiayi Ho in Beijing also contributed to this article.)