China’s CCB says 10% Bank of America Stake ‘Reasonable’
HONG KONG (Reuters) – China Construction Bank (CCB) (0939.HK), the world’s second-largest lender by market value, said on Monday it would be “reasonable” for major shareholder Bank of America (BAC.N) to reduce its stake to 10 percent.
Amid speculation the struggling U.S. bank will further sell down its remaining 16.6 percent stake to generate cash, the Chinese bank’s CFO, Pang Xiusheng, said CCB had seen no increase in its non-performing loans ratio so far this year.
CCB, which saw its share price fall 9.6 percent on Monday after it reported weak earnings, also said that its new loan target for the year is 500 billion yuan ($73.1 billion), having already lent out 350 billion in the first two months.
CCB President Zhang Jianguo told a news conference he considered it would in the future be “a reasonable arrangement for BofA to maintain about a 10 percent stake.”
Other Western banks have sold down their investments in Chinese banks as a brutal economic slowdown has driven them to seek new ways of boosting depleted cash reserves to strengthen balance sheets.
BofA cut its CCB stake by 2.5 percent earlier this year…