Bank of America late on Monday announced it is to sell around half of its ten percent stake in China Construction Bank to a group of investors in an effort to increase capital and shed assets.
The sale of around 13.1 billion shares is expected to generate an estimated $8.3bn in cash proceeds and an after tax gain on sale of around $3.3bn, the bank stated.
The US’s largest lender by assets said in a statement: “The current proposed Basel III standards place restrictions on capital that represents ownership in financial institutions above ten percent. The sale of CCB shares announced today would put Bank of America’s ownership in CCB below this percentage and would remove the significant investment in financial institutions deduction from the company’s tier one common capital under Basel III associated with this CCB stake.”
