On Tuesday, Bank of America Corp had started selling its remaining stake in China Construction Bank Corp. The stake sale was valued USD1.5 billion according to a term sheet of the deal seen by Reuters. This marked the final step of the US bank's exit from the asset.
Bank of America joined the list of Western banks that had found their investments in Chinese financial companies had not provided any of the strategic benefits they had hoped for. Earlier this year, Goldman Sachs Group Inc. sold their investment from Industrial and Commercial Bank of China.
The exit from US banks in some Chinese financial firms came after the latter had shown signs of stress, bad loans, and slow growth. This had resulted for Chinese lenders to prepare equity sales that would bolster their capital base.
Even before China's banking sector weakened, the US and European banks already decided to sell the assets. Most of the US banks aimed to focus on their main businesses and use the money from the sale to increase their capital bases.
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