BoA inks $8.3b China bank sale

Bank of America (BAC.NYSE) plans to sell about half of its stake in China Construction Bank (601939.SH, 0939.HK) for US$8.3 billion as it sheds assets to bolster its capital and meet new international standards, Reuters reported. The bank declined to name the group of investors that are purchasing the 13.1 billion shares, but two sources said the group includes Temasek, Singapore’s sovereign wealth fund. Bank of America expects to record a US$3.3 billion gain when the deal closes in the third quarter. Under proposed Basel III rules, the deal would bring the bank’s core capital levels to 5.7%, while the bank is targeting somewhere around 6.75% or 7% by 2013, said David George, an analyst at Robert W. Baird & Co. In recent weeks, Bank of America has agreed to sell a US$8.6 billion credit card portfolio to TD Bank Group and been in talks to sell US$1 billion of real estate assets to Blackstone Group (BX.NYSE). The bank’s shares hit 30-month low in August due to investor concerns about losses from mortgages and litigation.