Strategic Assistance Agreement Continues
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.