HK shares follow Shanghai to finish at two-week low

* China banks drop on talk of likely tightening of lending

* CITIC Pacific jumps after sale of asset

* China Natl Bldg Materials soars on forecast-beating profit

(Updates to close)

By Parvathy Ullatil

HONG KONG, April 22 (Reuters) - Hong Kong shares shed 2.7 percent, to finish at a two-week low on Wednesday as the Shanghai market pulled back on talk China's regulators may tighten new lending after a record first quarter for loan growth.

Brokers cited market talk that China's regulator was investigating money flows to see how much of the new lending was finding its way into stock speculation. They also noted speculation that China was looking to lift its moratorium on initial public offerings, to explain the sharp drop on the Shanghai bourse.

"When the Shanghai index crossed 2,500 points it must have set off a few alarm bells; Chinese regulators don't want to see the markets overheat again," said Alex Tang, research director at Core Pacific-Yamaichi International.

"But they may not take any drastic measures to talk down the market, after all they have done to boost investor sentiment," he said.

China Construction Bank (0939.HK) slid 5.9 percent to HK$4.33, while Bank of China (3988.HK) was down 4.1 percent at HK$2.82. Top lender ICBC (1398.HK) retreated 3.4 percent, while Bank of Communications (3328.HK) was 2.8 percent lower.

The benchmark Hang Seng Index .HSI ended 407.44 points lower at 14,878.45.

HSBC (0005.HK) retreated 1.7 percent, adding to Tuesday's steep losses as doubts emerged about credit quality deterioration at U.S. banks.

On Tuesday, Treasury Secretary Timothy Geithner said most U.S. banks had enough in reserve to continue lending, but investors are cautious about prospects for further write-downs and capital needs at banks around the world, especially after the International Monetary Fund said write-downs could reach $4.1 trillion.

Meanwhile, emerging markets-focused lender Standard Chartered (2888.HK) jumped 5.6 percent after Goldman Sachs rated the stock a buy, making a "right time, right place, right moves, right price" argument for the stock.

The China Enterprises Index .HSCE of top mainland companies was 3.5 percent lower at 8,721.25.

CITIC PACIFIC, CNBM BUCK TREND