Bank of America Corporation today announced that it agreed to sell its remaining equity investment in China Construction Bank Corporation (CCB), representing approximately 2 billion shares, or 1 percent of all CCB shares outstanding. The strategic assistance agreement (SAA) between Bank of America and CCB, which was recently extended to 2016, will continue.
Under the SAA, Bank of America provides advice and assistance to CCB in specified business areas, focusing on processes and systems including customer service and sales models. Bank of America benefits through increased brand recognition in China and enhanced international business experience for Bank of America employees. Approximately 3,100 Bank of America employees and 5,000 CCB employees have participated in SAA exchanges since 2005.
"The Bank of America-CCB relationship continues to bring substantial benefits to each company," said Bank of America Chief Executive Officer Brian Moynihan. "We have built a strategic partnership based on shared operational expertise, and our clients in China and Asia recognize Bank of America's ongoing association with one of the world's leading financial institutions."
The transaction is expected to generate a pretax gain of approximately $750 million in the third quarter of 2013. This gain could be partially offset by negative fair value option (FVO) adjustments and debit valuation adjustments (DVA) if the company’s credit spreads, which have improved significantly during the third quarter of 2013, remain at current levels when measured on September 30, 2013.Forward-looking statementsCertain statements in this news release represent the current expectations, plans or forecasts of Bank of America based on available information and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements often use words like “expects,” “anticipates,” “believes,” “estimates,” “targets,” “intends,” “plans,” “predict,” “goal” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” The forward-looking statements made in this news release include, without limitation, statements concerning the estimated pretax gain on the sale of CCB shares, expectations regarding the possible impact to noninterest revenue of FVO and DVA, and assumptions regarding the company’s credit spreads. Forward-looking statements speak only as of the date they are made, and Bank of America undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
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