Bank of America Sells Most of China Construction Stake Boost Its Capital
The sales are expected to generate an after-tax gain of about $1.8 billion, Charlotte, North Carolina-based Bank of America said today in a statement. After the closing, the company will own about 1 percent of the common shares of CCB, Bank of America said.
Bank of America Chief Executive Officer Brian T. Moynihan, 52, has been selling businesses and assets as the firm seeks to comply with international capital standards set by the Basel Committee on Banking Supervision. The firm has plunged 53 percent this year in New York trading amid investor concern that it may need to issue stock to offset capital depleted from mortgage-related losses.
“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,” Chief Financial Officer Bruce Thompson said in the 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.”
Thompson said it would strengthen the Tier 1 common capital ratio by approximately 24 basis points under Basel I requirements.
To contact the reporters on this story: Hugh Son in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: David Scheer at email@example.com