CCB says BofA holding cut understandable, cooperation to continue
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Xinhua News Agency, August 30, 2011
China Construction Bank (CCB), the country's second largest lender, said?Tuesday that it "understands" Bank of America's (BofA) decision to sell half of its 10 percent stake in CCB, and that the cooperation between the two banks will deepen in future.
The U.S. banking giant announced late Monday that it will sell roughly 13.1 billion common shares of CCB to generate approximately 8.3 billion U.S. dollars in cash to shore up its capital base, which will hold approximately five percent of CCB shares after the transaction.
CCB said in a press release to Xinhua that the bank understands BofA's cut holding based on its own conditions.
BofA has promised to make no changes to the two banks' strategic cooperation partnership, which will further deepen as a new five-year strategic cooperation plan will begin soon after the current cooperation agreement ends, said the CCB.
CCB and BofA kicked off a seven-year strategic cooperation in 2005, which has helped CCB transform into a modern commercial bank.
BofA will sell the stakes to "a group of investors," and the transaction will be completed before the end of next month, BofA said previously. It will collect an after-tax gain of 3.3 billion U.S. dollars in its sale of the shares.
CCB shares rose 0.89 percent to 4.54 yuan in the Shanghai market and jumped 1.8 percent to 5.65 HK dollars in Hong Kong on Tuesday.
