BofA Sells China Bank Shares
Bank of America today continued what appears to be a systematic effort at improving its financial stability, this time unloading a large chunk of its ownership in one of China's largest banks. Part of what investors and regulators are so worried about is whether Bank of America has enough cash on hand to survive another financial crisis. CEO Brian Moynihan has repeatedly insisted Bank of America's capital levels are strong. But he's also taking pretty significant steps to back that up - including the $5 billion stock sale to mega-investor Warren Buffett last week. The latest move has Bank of America unloading about half of its stake in China Construction Bank to a group of unidentified investors. Bank of America says it will make about $8.3 billion in cash on the deal and still hold on to a five percent stake in the giant Chinese bank. In the last month, Bank of America also sold its Canadian credit card division and put its European card operation up for sale. Dumping what the bank calls "noncore assets" is a key part of Moynihan's strategy to return Bank of America to a stronger position. Investors were apparently encouraged by news of the China Construction Bank sale, driving Bank of America's shares up more than 8 percent to close at $8.39. That's an improvement over the $6.10 share price Bank of America had just one week ago.