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Bank of America sold a $1.47 billion stake in China Construction Bank on Wednesday, the latest foreign institution to shed its investment in a Chinese lender after initial optimism about the potentially lucrative market wore off.
The U.S. bank sold 2 billion shares, or 1 percent, of China Construction Bank Corp., one of China's four major state-owned commercial lenders, for 5.70 Hong Kong dollars (73.5 cents) each. The shares were the last of its stake in the Beijing-based lender.
Over the past decade, Bank of America Corp. and other Western banks bought stakes in China's major state-owned commercial lenders ahead of their initial public offerings.
The investments were aimed at building relationships to help them expand in China but its banking industry has largely remained a closed shop to foreign institutions.
Still, Chinese bank shares have multiplied in value, earning their foreign investors billions of dollars in profits.
Bank of America, based in Charlotte, N.C., bought 9 percent of the Chinese bank in 2005 for $3 billion but in recent years has progressively reduced its stake.
In 2011, Bank of America sold 13.1 billion Construction Bank shares worth $8.3 billion. At that time, it said the sale would help it comply with new international regulations created following the global crisis that require big financial institutions to hold more cash against minority stakes in other financial institutions.
In May, Goldman Sachs sold its remaining stake in China's biggest commercial lender, state-owned Industrial & Commercial Bank of China Ltd., for $1.1 billion.