Faced with an order from regulators to raise nearly $35 billion in additional capital, Bank of America (BAC) decided to sell part of its stake in China Construction Bank, the world's second-biggest bank by market share. The move will raise some $7.3 billion.

By selling its stake in CCB, Bank of America is showing that closing the yawning gap between the capital it has and what regulators say it needs will involve some choices its executives clearly don't relish. But it's also clear they see the status quo as unsustainable. "Our game plan is to get the government out of our bank as quickly as possible," CEO Ken Lewis said in conference call with investors, The New York Times reported.

Raising as much as $16 billion in a stock sale, as it announced last week it would do, will increase common equity while diluting shareholders. And selling part of its stake in CCB will bring in fresh capital while potentially limiting future opportunities in an emerging superpower's financial sector.

Still, after the stress tests' results were released last week, few other options may have existed. And with a 10.6 percent stake in CCB still on its books, Bank of America will keep some of its options open.

Western financial institutions snapped up stakes in up-and-coming Chinese banks in recent years in hopes of profiting from the world's largest country's maturing economy. Now they're racing to exit the investments as they desperately seek capital to shore up their balance sheets.

American Express (AXP) and German insurer Allianz sold stakes in the International and Commercial Bank of China last month, and embattled Royal Bank of Scotland dumped its holdings in the Bank of China in January.

By doing so, Bank of America and its peers are exchanging potential growth in China for a better chance at survival today. It may not be a trade they're eager to make, but they might not have many other choices.

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