A CHINESE consortium has emerged as the biggest buyer of the China Construction Bank stake that Bank of America sold last month, according to reports this weekend.
It is understood that the State Administration of Foreign Exchange, which manages most of China’s $3,200bn in foreign reserves, the National Social Security Fund, and Citic Securities bought the CCB shares.
Bank of America announced last week that it sold 13.1bn shares -- half of its holdings in China’s largest bank by assets -- for $8.3bn (£5.1bn), in a deal which marks the troubled bank’s latest efforts to shed assets and boost capital.
The sale will reduce BofA’s stake to about five per cent. The bank will be free to sell the remaining shares in 2013.
It emerged last week that Temasek Holdings, the Singapore state investor was also among institutions that bought the shares offloaded by BofA, only about a month after it sold about $1.5bn worth of CCB shares at a much higher price. Temasek's stake in CCB fell to around 6.4 per cent after that sale.
In August, CCB reported a 31 per cent rise in pre-tax profits over the same period last year, but the lender’s shares are down 17 per cent so far this year, more than the 12 percent decline on the benchmark Hang Seng Index.
There have been widespread concerns that asset quality at Chinese banks such as CCB may sour if the country’s economy slows, as many of them had boosted lending during the global financial crisis.