Bank of America is selling its Hong Kong-based retail and commercial franchise Bank of America (Asia) to Chinese Construction Bank for $1.25 billion.
The North Carolina based bank said that it made the decision to divest its controlling stake in Bank of America (Asia) after concluding that it did not have the economies of scale to remain competitive in the region. The bank is 17th in assets in Hong Kong, a local market dominated by a few top players, the BoA said.
The franchise includes 14 offices in Hong Kong and three offices in Macau with approximately $6.3 billion in assets and $3.7 billion in deposits. While Bank of America will continue to invest in and build out our wholesale banking businesses in Asia, this sale reflects Bank of America’s philosophy of having significant market share or presence where we choose to do business, said Kenneth Lewis, Bank of America chairman and CEO.
BoA said that it expects the deal to close by the end of the year, subject to regulatory approval.