New York - AFP
Embattled Bank of America said on Monday it will sell the bulk of its shares in China Construction Bank in deals expected to net an after-tax gain of about $1.8 billion. Bank of America said in a statement it would continue to hold about 1.0 percent of the common shares of CCB following the private sales of 10.4 billion shares, underscoring that the two banks\' strategic partnership remains intact. In August the struggling US banking giant sold roughly half of its 10 percent share in the company for $8.3 billion, strengthening its capital base and better implementing tougher standards imposed by global regulators. Bank of America did not identify who was acquiring its shares of CCB, describing the buyers only as \"a group of investors.\" The transactions are expected to be completed this month, it said. The Charlotte, North Carolina-based bank is under pressure to reduce its investments in order to strengthen its capital base and meet the new international capital standards. \"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,\" BofA\'s chief financial officer, Bruce Thompson, said in the statement. Thompson said the share sales would generate approximately $2.9 billion in additional Tier 1 common capital. Bank of America has struggled to recover from the 2008 financial meltdown and its disastrous acquisition of troubled mortgage lender Countrywide Financial, which has resulted in lawsuits after the crash of the US housing market. Investors have been dumping the US bank\'s stock amid fears that its legal woes and the sluggish US economy would prevent it from raising enough capital to meet the Basel III standards imposed after the financial crisis. The 2008 crisis exposed many banks as undercapitalized, and the Basel III requirements have proved to be a headache for Bank of America and other US banks. Under the rules, which are being implemented in phases from 2013 to 2019, banks need to reduce their debt-to-capital ratios and can no longer count certain kinds of risky assets as their base capital.