BANK of America Corp, the second-biggest United States lender by assets, has agreed to sell almost all of its remaining China Construction Bank stake after divesting about 13 billion shares in August to bolster capital.

BofA will sell 10.4 billion CCB shares this month to a group of investors in private transactions for an after-tax gain of about US$1.8 billion, the Charlotte, North Carolina-based firm said yesterday in a statement. After the closing, the company will own about 1 percent of the common shares of CCB, the US lender said.

BofA 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 lender plunged 53 percent this year in New York trading amid investor concern that it may need to issue stock to replenish capital depleted by about US$40 billion of expenses caused by faulty mortgages.

"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 around 24 basis points under Basel I requirements.

CCB remains optimistic about cooperation between the banks, said a press officer for the Beijing-based lender who declined to be identified, citing company policy. CCB knew of BofA's decision and said that the sale wouldn't affect the Chinese firm.

The US bank said this month in a regulatory filing that it "remains a significant shareholder in CCB and intends to continue the important long-term strategic alliance with CCB originally entered into in 2005."

Sales of 2 billion of the bank's CCB shares are curbed until August 2013, BofA said. About 10.5 billion shares were classified as "available for sale" as of September 30.

Goldman Sachs Group Inc, the fifth-biggest US bank by assets, raised US$1.1 billion last week selling shares of the Industrial and Commercial Bank of China, the country's biggest lender. It was the third time that New York-based Goldman Sachs has cut its investment in ICBC.

Source:shanghaidaily