Bank Of America Investment And Construction Bank Cash In Total 19 Billion 400 Million U.S. Dollars &Nbsp; War Investment Role Was Questioned.

In August 30th, just after the lifting of the ban period, Bank of America could not wait to reduce 13 billion 100 million H-shares in the Construction Bank (4.55,0.00,0.00%), earning a profit of $3 billion 300 million after tax. The takeover of the stake is Singapore's sovereign wealth fund Temasek, and several agencies including the China foreign exchange administration and social security fund. However, several Chinese institutions have not yet confirmed the news of the Hong Kong Construction Bank's H-share.

Bank of America ccb Route

Back in June 2005, China Construction Bank, as the first state-owned commercial bank to eat crabs, introduced the Bank of America as a strategic investor. Bank of America invested $2 billion 500 million for the first time, subscribed 17 billion 480 million H-shares from the Central Huijin, and then subscribed for $500 million in the initial public offering of China Construction Bank H shares. The total amount of $3 billion was 9% of CCB's shares. At the same time, in the agreement signed with Huijin, the Bank of America has retained a very special cheap option, that is, in the next few years, the Bank of America can increase its stake in the Construction Bank to 19.9%, and the exercise price will be determined according to the plateau of "two times the net assets of the latest audited net asset per share" and "1.0712 times the IPO price of the H-share" by the CCB in the next 1.2 years.

After that, the Bank of the United States took two exercise rights. For the first time, it purchased 6 billion H-shares from Huijin for the first time in May 2008 at HK $2.42, and second times purchased 19 billion 580 million shares of Hong Kong stock in November of the same year in HK $2.8.

In fact, the 19 billion 100 million Bank H shares of Bank of China, which was first bought by Bank of America, were officially lifted in October 2008. At that time, the subprime mortgage crisis broke out. The market thought that the Bank of America would substantially reduce CCB to save itself. However, at that time, CCB was too low in price (HK $2.5 / share), and the US bank did not reduce its holdings. Instead, it bought 19 billion 580 million H-shares from Huijin and increased its shareholdings from 10.75% to 19.13%, close to the upper limit of shareholding. At that time, CCB audited net assets per share of 2.05 yuan, and Bank of America's exercise price was 2.46 yuan (about HK $2.80).

In January 2009, Bank of America The first reduction of CCB shares brought huge market shocks, and the H-share price of Construction Bank fell 8.76% on the day of the news. At that time, the subprime mortgage crisis was spreading, and Swiss banks and Royal Bank of Scotland were also unable to sell 6 billion 800 million shares of Bank of China. Bank of America has just completed its acquisition of Merrill Lynch and waited for government relief to supplement its liquidity. At the price of HK $3.92 per share, it allocated 5 billion 620 million shares of Construction Bank to institutional investors, with a reduction of 12% compared to the market price of HK $4.45 / share.

The largest reduction in Bank of America was in May 2009, when the US government's stress test results for 19 major banks were announced, and the bank failed to pass and had to add about $30 billion in capital. The price reduction was HK $4.2 / share, with a discount rate of 14.3%. The recipients were from the Magnolia fund, China Life Insurance (15.59,0.00,0.00%), BOC International and Temasek. Bank of America has cash in 7 billion 300 million dollars in this round of reduction.

In November of last year, when Bank of China A+H was allotment, it was unable to participate in the rights issue, and transferred the 1 billion 790 million shares to Temasek. Bank of America did not disclose the price of the transfer rights, but the bank speculated that the bank could gain about $730 million because of the 40% discount from the market price.

Coupled with the latest reduction, the US bank has reduced its total holdings to $19 billion 400 million (pre tax) for the five time. At present, the market value of the remaining 5% CCB shares is about US $9 billion 140 million. In addition, in the five years from 2005 to 2010, Bank of America gained a lot of dividend income. The first financial daily correspondent calculated the median interest rate of RMB to us dollar on each payday, and the bank's dividend income (pre tax) amounted to $3 billion 223 million due to its holding of CCB shares. In the investment of Bank of China, Bank of America has a total income of 31 billion 760 million US dollars, minus its input cost of US $11 billion 910 million, and US dollar profit of about US $19 billion 600 million.

The role of war investment has been questioned.

For a long time, the state-owned banks have been "trapped". Cheap sale The theory is endless. The bank's holdings of CCB shares were led by the "national team" led by the safe. The role of strategic investors is also questioned by market participants: because state-owned banks overemphasize control rights, the depth of cooperation with foreign shareholders is not enough.

Wang Jianxi, former vice chairman of Huijin Company, once pointed out that from the perspective of Huijin Company, as an overseas strategic investor, as long as the shareholding ratio can reach 5%, a director can be sent. If more than 10% of them can be reached, two directors can be sent, and they can be sent as vice presidents at the senior management level. However, except for a deputy governor appointed by HSBC, there was no such arrangement between the two sides.

"In the state-owned banks, the cooperation between China Construction Bank and Bank of America has some substantive contents, especially in the transformation of the network, the CCB has learned a lot about the concept of the US bank." An industry insider told our reporter, "and both sides have complied with the commitments made at the time that they did not enter each other's main markets, and the US bank simply sold its Asian retail business to CCB."

In the view of the above, foreign banks such as RBS, UBS and other foreign banks invested in Chinese banks at that time, mostly for the purpose of gaining the two level license of private banking and credit card business in China.

In the view of Jin Lin, a securities analyst at the Orient Securities bank, the most important thing to look back at the role played by strategic investors is credit enhancement. The Chinese banks that just stripped bad debts were around 3%~5% at the time, and the capital adequacy ratio was very low. "Foreign capital war investment" helped Chinese banks to raise funds in the two tier market and raise the price of the issuance.

Last year, ABC listed shares in A shares and H shares, which is the official conclusion of the listing of state-owned banks. Compared with other major banks, ABC is the only one that has not introduced foreign strategic investors. One analyst thinks that on the one hand, the financial institutions in Europe and the United States have not recovered from the financial crisis themselves, and on the other hand, the environment has changed. "The market now knows that state-owned banks can make money."