BankAm halves its stake in China’s CCB, nets $8.3 bn
30 Aug 2011
The largest US bank by assets, Bank of America Corp (BankAm) is selling about half of its 10-per cent stake, or roughly 13.1 billion shares in China Construction Bank to a group of investors for $8.3bn in cash.
The US bank is currently second-largest shareholder in CCB, with a 10.23-per cent stake, behind SAFE Investment Ltd (Huijin), the Chinese government body that controls China Construction Bank, through a majority 57.03-per cent stake, held directly and indirectly through a wholly-owned subsidiary - China Jianyin Investment Limited.
The divestment is expected to close in the third quarter of 2011 and would help the US bank strengthen its capital base to comply with Basel III norms.
The reduction of BankAm's ownership in CCB to below 10 per cent also meets the current Basel III norms that which place restrictions on capital that represents ownership in financial institutions above 10 per cent, said Bruce Thompson, chief financial officer of BankAm.
After the deal, BOA will hold approximately 5 per cent of CCB, the bank said in a statement on Monday.
The bank has been in talks with buyers to sell its stake in China Construction Bank for some time now (See: BankAm likely to sell part stake in China Construction Bank).
