NEW YORK—Bank of America Corp. said on Monday that it plans to sell most of its shares in China Construction Bank (CCB), China’s No. 2 lender.
The sale, which would generate around $6.6 billion in cash, will help the Charlotte, N.C.-based bank boost its overall capital. The sale is part of an overall strategy to unload its stake in CCB, as it announced almost $15 billion in aggregate value in sales of CCB’s shares over the last few months.
Bank of America first invested in CCB in 2005, and later boosted its shares in 2008, to as much as 19 percent of CCB’s outstanding shares. BofA said Monday that it expects to profit from the sale, which would dwindle its shareholding of CCB to just 1 percent.
Over the last decade or so, several U.S.-based banking giants have invested in Chinese banking firms. More recently, they’re beginning to sell their stakes as banks struggle with lower revenues and higher regulatory restrictions. In addition, reports have surfaced from China regarding an increased risk of loan losses at Chinese banks.
Brian Moynihan, CEO of Bank of America, has in recent months shed assets to deal with the firm’s struggling stock price and increased residential mortgage writedowns due to its 2008 acquisition of Countrywide Financial Corp.
