BEIJING--Bank of America Corp.'s (BAC) sale of its remaining
stake in China Construction Bank Corp. (0939.HK) reflects tighter
capital requirements in the U.S. and not concern over the Chinese
bank's prospects, China Construction Bank said in a statement
Wednesday.
Bank of America sold 2 billion Hong Kong-listed shares of China
Construction Bank, raising the equivalent of US$1.47 billion,
according to a term sheet seen by The Wall Street Journal
Tuesday.
China Construction Bank cited Bank of America as saying it
needed to replenish its capital base as a result of tighter
requirements by U.S. regulators, but that it will maintain
long-term strategic cooperation.
International regulations known as Basel III--the latest
standard for bank capital, risk management and liquidity--have
prompted international financial institutions to shed minority
investments. U.S. regulators are tightening their oversight in line
with the standards.
China Construction Bank said China's banking sector will
continue to see stable profit growth and asset quality given
continued economic expansion.
The bank also said it plans to accelerate the overhaul of its
operations to better serve clients and boost investor returns. It
didn't provide details, but many Chinese banks are looking for
fee-generating businesses as the authorities pursue interest rate
reform--a policy that is likely to narrow interest rate margins and
reduce profit on traditional lending.
Write to Grace Zhu at grace.zhu@dowjones.com
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