With the new stress test results out, many banks are in need to to raise capital. Bank of America, which is required to raise 34 billion, has begun doing just that.
Bank of America has decided to reduce its stake in China Construction Bank (CCB) to 10.95% to help strengthen Bank of America's capital levels while still allowing the company to remain a long term partner with CCB.
"In our view, the cooperation between the two banks has been very successful," said Greg Curl, Bank of America Global Corporate Strategy and Planning Executive." I am pleased with the progress we have achieved with our partner. We intend to remain long term, strategic partner with CCB and maintain our ownership at or above 10 percent."
China Construction Bank is the leading commercial bank in China and consists of three principal business segments: corporate banking, personal banking and treasury operations.
Under the Strategic Assistance Agreement with CCB, Bank of America experts assist CCB with risk management, governance, bank cards, consumer banking, information technology, human resources and treasury services. Since October 2005, more than 850 teammates from across Bank of America have contributed talent to more than 100 Shared Experience Sessions, 54 collaborative and advisory projects and 36 training sessions.
The strategic agreement has also provided Bank of America associates with more than 320,000 hours of international experience through their work with CCB.
Bank of America sold 13.5 billion shares in CCB or 5.78percent to an investment consortium this week. The proceeds from the sale, after adjusting for the cost of the original investment and applicable taxes, will bolster Bank of America's common capital levels, Bank of America remains the second largest shareholder in CCB.
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