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Construction Bank confirms BoA's stock sale

(Xinhua)
Updated: 2009-05-14 13:43

A China Construction Bank (CCB) spokesman confirmed on Wednesday evening that Bank of America Corp (BoA) had sold 13.5 billion CCB H shares, or a 5.78 percent stake in CCB, and the sale was "normal market activity".

"CCB understands BOA's selling of shares after the lock-up period is to improve its asset condition," said the spokesman.

BoA raised HK$56.74 billion ($7.3 billion) from the stake sale, CCB said in a statement on Thursday.

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BoA would still have 25.6 billion CCB H shares, or an 11 percent stake in CCB after the deal, and would maintain its status of long-term strategic investor of CCB, said the spokesman.

China Life and its affiliates bought 2.77 billion shares of CCB, and BOCI Asia Ltd, bought 2.21 billion shares.

According to the spokesman, the two banks were scheduled to initiate ten strategic coordinating projects, including those in retail and corporate business and in information technology, and to complete 59 experience-sharing and training programs.

"Bank of America has said that it would maintain a sound strategic cooperating relationship with CCB after the stake sale, and would hold the remaining shares for a long time," the spokesman said, noting that CCB would continue to cooperate with BoA.

Analyst with CCB said BOA sold the stake to replenish its capital, which did not mean that it had a declining interest in the Chinese banking industry.

The US Federal Bank has asked that 10 of the 19 US banks to raise about $75 billion in new capital to absorb possible future losses.

CCB's A shares opened at 4.61 on Thursday, down 0.65 percent from Wednesday.