Tomahawk, WI 9/06/2013 (BasicsMedia) – Bank of America Corp (NYSE:BAC) has finally offloaded its final stake on China Construction bank Corp for $1.47 billion. This marks an end to an era in its attempt of trying to tap into china market which was perceived to contain limitless growth opportunities. This move is highly seen by analysts as an attempt of trying to restructure before the coming into use the policy that requires banks to hold extra capital against majority stakes in other financial institutions. According Reuter’s calculations Bank of America previous sales of CCB stock had raised a total of $16.37 billion

The shareholdings of Bank of America according to Keith Pogson a Hong Kong based partner had not been able to yield the kind of access into China that the western banks had hoped for initially. Bank of America might have suffered exorbitantly from competition by China’s big banks which have resided to offering lower and better terms to customers. The return on investments by western banks seeking ventures in China greatly declined due to the number of underwriters that clocked up to 20 in some big deals. Trimming it expenses Bank of America was able to increase its 2nd quarter profit by 70% to $3.57 billion. This was achieved after trimming expenses by 6% while also boosting the Basel III capital ratio

Bank of America sold its shares at China bank for HK$5.70 each which was a discount of 3.9% as of 3rd of September. The move by bank of America to withdraw completely from China makes it the second of US banks pulling out of China. Goldman Sachs was the first to pull out as it offloaded its remaining $1.1 billion stake in industrial and commercial Bank of china. Bank of America had to pull out of China as the Chinese banking system is showing signs of stress with bad loans slowly but creeping into the economy.

Bank of America expects to record about $750 million gain before taxes on the final stake of the sale. With total gains from dividends and the sale of shares, the total amount of profit that Bank of America stands to go home with might hit the $18billion mark before taxes in accordance to regulatory fillings between 2009 and 2013. The sale of China Bank by Bank of America is also an effort of cleaning up its balance sheet a process that it has been undertaken over the past few months. In its annual report Bank of America had reported that it had divested more than $60billion worth of assets in line of trying to improve its capital ratios thereby boosting revenues.

The closing price of BAC’s stock was $14.37 gaining 0.35% in the previous session with a volume of 71.29 million shares compared to the average volume of 154.38 billion.

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