BofA sells $6.6b of CCB shares
Bank of America (BofA) has jettisoned the majority of its remaining shares in China Construction Bank (CCB) for nearly $6.6 billion. The US bank now owns 1% of CCB, down from the 9.9% it once held.
BofA sold 10.4 billion CCB shares and received a profit of approximately $1.8 billion on the transaction, the bank announced. The sale comes as BofA is looking to bolster its capital reserves to comply with regulations.
"Our decision to sell the bulk of our remaining shares in China Construction Bank is consistent with our stated objective of continuing to build a strong balance sheet," BofA's CFO Bruce Thompson said in a statement. "We expect this action, supplemented by the related realization of deferred tax assets, will generate approximately $2.9 billion in additional Tier 1 common capital and further strengthen our Tier 1 common capital ratio by approximately 24 basis points under Basel I."
The transaction is expected to close this month.
BofA paid $3 billion for a 9.9% stake in CCB ahead of the bank's IPO in 2005. In August, BofA sold a 5% stake in CCB to a consortium that included China's State Administration of Foreign Exchange, the National Social Security Fund and CITIC Securities for $8.3 billion, leaving BofA with approximately 5% of CCB. That deal saw Temasek become the Chinese bank's second-largest shareholder, with BofA dropping to third.
The news comes a week after Goldman Sachs also sold $1.1 billion worth of shares in Industrial and Commercial Bank of China (ICBC).
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