BofAML to retain at least 5% of its CCB holding

BofAML is free to exit most of its stake, worth an estimated $17 billion, at the end of August. However, it was reported earlier this month that the bank was struggling to find buyers for the holding. The Financial Times claimed that talks with potential buyers in the Middle East - including the Kuwait Investment Authority (KIA) and the Qatar Investment Authority (QIA) - were floundering due to concerns about forthcoming rights issues, share sales and new listings by Chinese lenders.

KIA already holds stakes in Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (AgBank). Both are expected to launch rights issues with KIA participating, so it is wary of raising its exposure to China's banking sector still further.

BofAML sold its option to purchase shares in a CCB rights offering held last year to Temasek. But the Singaporean sovereign wealth fund is unlikely to be interested in BofA's holding, having sold off $1.2 billion of its own shares in CCB in July.

Confirmation of the enduring partnership came as CCB announced first-half net profits of RMB92.8 billion, up 31% year-on-year. The bank also said that it would issue the bulk of its RMB80 billion ($12.5 billion) subordinated debt offering - approved by shareholders in June - in Hong Kong.

BofAML paid $3 billion for a 9.9% stake in CCB ahead of the bank's IPO in 2005. It currently holds 25.6 million shares and 23.6 million of them can be sold on August 29.

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• Topics
• Financials
• Greater China
• Exits
• Temasek Holdings
• CCB