RETAIL BANKING | Tony Chua, China

Bank of America finds difficulty in divesting CCB stake

Once valued at $20bn, the BofA stake is now seen to be worth several billion dollars less.

Bank of America is facing difficulties in selling its 10 per cent stake in China Construction Bank, partly because potential investors are expecting a deluge of rights issues, share sales and new listings from Chinese banks

BofA, which is looking to raise capital when its share price has been hammered, can sell all or part of the stake when a lock-up period expires at the end of the month.

But it might now raise less than it had hoped. The BofA stake, once valued at $20bn, is now believed to be worth several billion dollars less, according to bankers.

The US bank has approached sovereign wealth funds and other investors in the Middle East and in Asia, according to people familiar with the matter.

The Kuwait Investment Authority was one potential buyer BofA approached, these people add, but the sovereign wealth fund already holds large stakes in ICBC and Agricultural Bank of China.

“Right now, the KIA does not want to do anything more,” says one person with knowledge of the matter. “They think they have enough exposure to Chinese banks.”

View the full story in Financial Times.

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