BANK of America (BofA) is selling its remaining BlackRock stake back to BlackRock for $2.5bn (£1.54bn), its latest step to prepare for new industry capital requirements.
The sale further chips away at the relationship between the world’s largest asset manager and the biggest US bank by assets, but a senior Bank of America official will remain on BlackRock’s board.
For Bank of America, the deal raises cash that can be put to work expanding other businesses and prevents the bank from having to hold a large amount of capital against the shares, which would be required under the new Basel III capital rules.
“This doesn’t change the bank’s position in the short-run, but you will see the difference when the new rules come into play,” said Marty Mosby, a bank analyst with Guggenheim Securities LLC.
Mosby estimated the deal will likely add a $300m pre-tax gain to the bank’s second-quarter earnings.
A BofA spokesman said the latest share sale is consistent with the bank’s strategy to sell business units that do not serve its core customers.
BofA acquired a stake in BlackRock as part of the Merrill Lynch deal in 2008.