Bank of America reduce stake with China

January 7, 2009

, BEIJING, January 7 – China Construction Bank (CCB) said on Wednesday that major shareholder Bank of America (BoA) reduced its stake, with reports saying BoA sold 2.8 billion dollars\’ worth of shares in the Chinese lender.

After the the sale of 5.6 billion Hong Kong-listed H shares, Bank of America\’s stake in CCB, one of China\’s big four state-owned lenders, declined to just below 17 percent from 19.1 percent, according to observers.

Both sides reaffirmed that the transaction would not affect their strategic partnership, according to the statement.

"Under the fluctuating international financial environment, it is a normal market activity by Bank of America to cut some of CCB\’s shares based on its own financial situation," the Chinese bank said in a statement on its website.

The US bank made 2.8 billion dollars from the sale as the price was set at 3.9 Hong Kong dollars (50 cents) a share, said Wednesday\’s Wall Street Journal, citing unnamed sources close to the matter.

Bank of America reportedly dropped an earlier plan to dispose of a three-billion-dollar CCB stake in December due to pressure from the Chinese bank.

It later denied that it had been pushed to drop that sale, adding it would keep "a significant ownership stake in CCB" while a sale of some shares was "possible".

China Construction Bank\’s shares closed at 4.5 Hong Kong dollars on Tuesday.

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