04-09-2013, 10:00 AM
Upon concern of NPL in big-five banks, on top of other factors, foreign funds have withdrawn from China banking stocks... are there opportunities for value hunt? Hmm... needs a through understanding of business model of China banks and their sustainability...
Bank of America turns its back on CCB
HONG KONG/NEW YORK — Bank of America said yesterday (Sept 3) that it started selling its remaining stake in China Construction Bank Corp (CCB) for as much as US$1.5 billion, marking the final step of the US bank’s multi-year exit from the asset.
The Charlotte, North Carolina-based bank joins a list of Western financial institutions that have found that their investments in Chinese financial firms did not give them the foothold they had hoped for in that country.
“The only thing that will be central to banking in China will be China’s domestic banks,” said Mr Donald Straszheim, head of China research at International Strategy & Investment Group in Los Angeles.
Earlier this year, Goldman Sachs Group sold out of its seven-year investment from Industrial and Commercial Bank of China.
The Chinese banking system has shown signs of stress, with bad loans picking up as economic growth slows. As a result, several Chinese lenders are preparing to launch equity sales to bolster their capital base.
But even before the Chinese banking sector weakened, many US and European banks decided to sell the assets to bolster their capital bases and focus on their main businesses.
Since US and European banks began building stakes in Chinese banks, new international capital rules have been formulated, which will make it more expensive for them to own shares of other financial institutions.
Bank of America said yesterday that it expects to record about a US$750 million (S$958.8 million) gain, before taxes, on the stake sale. With that profit, its total gains from dividends and selling shares will amount to nearly US$18 billion before taxes, according to regulatory filings between 2009 and 2013.
The bank’s investment dates to 2005 when it paid US$3 billion for a 9.9 per cent stake ahead of the Chinese bank’s initial public offering.
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http://www.todayonline.com/business/bank...s-back-ccb
Bank of America turns its back on CCB
HONG KONG/NEW YORK — Bank of America said yesterday (Sept 3) that it started selling its remaining stake in China Construction Bank Corp (CCB) for as much as US$1.5 billion, marking the final step of the US bank’s multi-year exit from the asset.
The Charlotte, North Carolina-based bank joins a list of Western financial institutions that have found that their investments in Chinese financial firms did not give them the foothold they had hoped for in that country.
“The only thing that will be central to banking in China will be China’s domestic banks,” said Mr Donald Straszheim, head of China research at International Strategy & Investment Group in Los Angeles.
Earlier this year, Goldman Sachs Group sold out of its seven-year investment from Industrial and Commercial Bank of China.
The Chinese banking system has shown signs of stress, with bad loans picking up as economic growth slows. As a result, several Chinese lenders are preparing to launch equity sales to bolster their capital base.
But even before the Chinese banking sector weakened, many US and European banks decided to sell the assets to bolster their capital bases and focus on their main businesses.
Since US and European banks began building stakes in Chinese banks, new international capital rules have been formulated, which will make it more expensive for them to own shares of other financial institutions.
Bank of America said yesterday that it expects to record about a US$750 million (S$958.8 million) gain, before taxes, on the stake sale. With that profit, its total gains from dividends and selling shares will amount to nearly US$18 billion before taxes, according to regulatory filings between 2009 and 2013.
The bank’s investment dates to 2005 when it paid US$3 billion for a 9.9 per cent stake ahead of the Chinese bank’s initial public offering.
...
http://www.todayonline.com/business/bank...s-back-ccb