Bank of America Corp had expected to end an eight year investment in China Construction Bank Corp. This was through posting USD750 billion in pretax gain from the sale of the remaining stake of BofA in the Chinese lender.
Bank of America had agreed to sell its shares in Construction Bank. BofA would sell 2 billion shares that would equal to 1% of the Chinese lender's stock. This was according to a statement issued by North Carolina based lender, Charlotte.
Bank of America said that the proceeds of the sale would be included in the third quarter results. It would also be reduced after accounting adjustments. Previously, Goldman Sachs Group, Citigroup and HSBC Holdings had sold their shares in the Chinese lenders. This was after the new international rules made it more expensive to own minority stakes in banks.
Previously, Bank of America gained around USD15 billion in dividends and sale proceeds. This was according to Bloomberg calculations based on regulatory filings.
Analyst from an analyst at FBR Capital Markets Paul Miller said, "They're still trying to right the ship, and I think the management team has done a great job given the ship that they've go. By righting the ship, you're giving up opportunities, but it's more important to get a lot of this stuff behind them."
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