/

BofA sells stake in key China bank

AFP-JIJI

Bank of America said Tuesday it had agreed to sell its stake in China Construction Bank to the Chinese lender, exiting an investment it made eight years ago.

The U.S. bank said it will sell approximately 2 billion shares, or 1 percent of all outstanding shares in CCB, China’s second-biggest lender, confirming earlier reports.

The statement did not provide the financial details of the sale. But at a reported price range for the shares of $0.73 to $0.75, the sale would bring in between $1.45 billion and $1.50 billion.

Bank of America initially paid $3 billion for a 10 percent stake in CCB in 2005 but sold most of it off two years ago to raise funds and shed noncore assets.

The announcement comes after CCB reported its first-half net profit rose 13 percent due to higher interest income and commissions. The stake sale is expected to generate a pretax gain of approximately $750 million in the third quarter of 2013, Bank of America said.