NEW YORK-Bank of Amer­i­ca Corp is sell­ing half of its stake in Chi­na Con­struc­tion Bank Corp, aim­ing to shore up its cap­i­tal base. The largest US bank by as­sets is sell­ing rough­ly 13.1 bil­lion shares in the Chi­nese bank for US$8.3 bil­lion to a group of in­vestors it did not name. The sale should gen­er­ate an af­ter-tax gain of US$3.3 bil­lion, and should close by the end of next month. The Char­lotte, North Car­oli­na, bank will still own about five per cent of Chi­na Con­struc­tion Bank af­ter the sale. It cur­rent­ly owns about ten per cent. The sale is the bank's lat­est move to in­crease its cap­i­tal base to com­ply with new reg­u­la­tions. Fi­nance Chief Bruce Thomp­son says the bank has raised about US$5.8 bil­lion in Au­gust.

Over the last month, Bank of Amer­i­ca has sold its Cana­di­an cred­it card di­vi­sion and has put its Eu­ro­pean card op­er­a­tion on the block, as it con­tin­ues to clear non­core as­sets from its books. The moves come amid re­cent fears that Bank of Amer­i­ca lacks suf­fi­cient cap­i­tal. In a state­ment yes­ter­day Bruce Thomp­son, the bank's chief fi­nan­cial of­fi­cer, said the deal would have a pos­i­tive im­pact on its cap­i­tal. "This sale of ap­prox­i­mate­ly half of our shares of CCB stock is ex­pect­ed to gen­er­ate about US$3.5 bil­lion in ad­di­tion­al Tier 1 com­mon cap­i­tal and re­duce our risk-weight­ed as­sets by US$7.3 bil­lion un­der Basel I." Un­der the terms of the deal, Bank of Amer­i­ca will sell 13.1 bil­lion com­mon shares of the Chi­na Con­struc­tion Bank Cor­po­ra­tion to a group of uniden­ti­fied in­vestors.

The bank on Fri­day was in ne­go­ti­a­tions with a col­lec­tion of sov­er­eign wealth funds in Asia and the Mid­dle East, The New York Times re­port­ed. The deal is ex­pect­ed to close lat­er in the quar­ter. Even af­ter the sale, Bank of Amer­i­ca will still hold about five per cent of Chi­na Con­struc­tion Bank. Ac­cord­ing to its state­ment, Bank of Amer­i­ca is in talks to ex­pand a sep­a­rate ex­ist­ing "strate­gic as­sis­tance agree­ment" be­tween the two banks. "Our part­ner­ship with Chi­na Con­struc­tion Bank has been mu­tu­al­ly ben­e­fi­cial," Moyni­han said in the state­ment. (AP)