UPDATE 1-China's ICBC taps banks for $7-10 bln stock offering

* BNP, BOCI, UBS among banks to handle H-share sale

* ICBC may replace bond plans in China with stock offering (Adds details and background)

By Kennix Chim and Fiona Lau

HONG KONG, May 11 (Reuters) - Industrial & Commercial Bank of China (ICBC) (1398.HK) has selected four banks to handle its Hong Kong share offering, sources said on Tuesday, in a deal aimed at raising $7-10 billion.

ICBC (601398.SS), the world's biggest bank by market capitalisation, chose BNP Paribas (BNPP.PA), BOC International, and UBS AG (UBSN.VX), nine sources close to the deal said, adding that ICBC had also chosen its investment banking arm to underwrite the sale.

The bank, the world's largest by market capitalisation, may also consider ditching its planned 25 billion yuan ($3.66 billion) bond offering in China and replace it with a stock placement on the Shanghai exchange, the sources said.

"The bank is looking at the A-share market as an alternative avenue for fundraising. Nothing has been fixed yet," one of the sources said.

The sources declined to be identified because they were not authorised to speak to the media.

ICBC declined to comment.

Chinese banks could collectively seek $60 billion or more from investors in Hong Kong and Shanghai, seriously testing appetites for providing funding to a group that doled out a record $1.4 trillion in new loans last year under Beijing's loose-money policy.

Agricultural bank of China [ABC.UL], China's No.4 lender, plans to raise $30 billion in Hong Kong and Shanghai. [ID:nSGE64401X]

The fundraising plans have already cooled investor appetites toward Chinese bank stocks, which now trade well below multiples for their global peers.

Despite reporting record quarterly earnings for the first quarter, ICBC, China Construction Bank (0939.HK) (601939.SS) and Bank of China (3988.HK) (601988.SS) now trade at about 10 times 2010 forecast earnings, compared with 14-15 times for international peers like HSBC Holdings (0005.HK)(HSBA.L) and Standard Chartered (2888.HK) (STAN.L).

Shares of ICBC have fallen 13 percent so far this year compared with the Hang Seng Index's .HSI 8 percent decline.