Bank of America to Invest US$3 Billion in and Form Strategic Partnership with China Construction Bank
Published time:2005-06-17


Beijing, China - China Construction Bank ("CCB") and Bank of America today announced the signing of a definitive agreement for Bank of America to invest an initial US$3 billion in CCB through a US$2.5 billion pre-IPO purchase of existing shares from the largest shareholder China SAFE Investments Ltd. ("Huijin") and a further US$500 million investment at CCB's planned international IPO. Bank of America will also have an option to purchase additional shares in the future to increase its ownership in CCB up to 19.9%. This transaction represents the largest single foreign investment in a Chinese company to date.

As part of the transaction, CCB and Bank of America have entered into separate agreements for Bank of America to provide strategic assistance to CCB in the areas of corporate governance, risk management, IT, financial management, human resource management, retail banking (including credit card), and global treasury services. As part of this strategic assistance program, Bank of America will provide approximately 50 personnel to advise CCB in these key areas. Bank of America will also have a seat on CCB's board of directors.

China Construction Bank is one of the largest commercial banks in China with total assets of approximately RMB 3,910 billion at the end of 2004. CCB achieved strong profitability and asset quality measures in 2004. With the Bank of America partnership, CCB becomes the first of China's "Big Four" banks to reach an agreement with a foreign strategic investor, achieving a significant milestone in its transformation.

Guo Shuqing, Chairman of China Construction Bank, said, "We are very pleased to have Bank of America, one of the world's largest, most successful and respected financial institutions, as our strategic partner. I firmly believe this is a win-win partnership. The most fundamental and challenging task in transforming CCB is to establish a culture that is customer centric and market driven. Our goal is to provide the best service to our customers. We have much to learn from our partner in serving customers and creating shareholder value. This is the core of our comprehensive cooperation."

Chang Zhenming, President of China Construction Bank, added, "Bank of America is the ideal strategic partner for us. We have built a leading corporate banking business and a large retail banking branch network in China. Bank of America has demonstrated its expertise in managing the largest retail branch network in the United States and in maximizing product sales while maintaining a strong asset quality. Their experience and skills will be very valuable to us in our building an internationally competitive modern commercial bank."


"This investment is aimed at creating a long-term benefit by partnering with the best positioned bank in China, one of the fastest growing economies in the world with 1.3 billion consumers," said Kenneth D. Lewis, Bank of America chairman and chief executive officer. "China Construction Bank has undergone an impressive transformation in the last several years. They have built a leading franchise in China, and we see value in combining their local knowledge and distribution with our product expertise, technology and experience with size and scale. Under our agreement, we will offer CCB the benefit of our experience in such areas as governance, risk management, credit cards, consumer banking and treasury services."

China Construction Bank and Huijin were advised in this transaction by Morgan Stanley and China International Capital Corporation.

China Construction Bank

China Construction Bank is the second largest commercial bank in China (source: The Almanac of China's Finance and Banking 2004 Edition) providing a comprehensive range of commercial banking products and services primarily to domestic corporate and retail customers in China.

CCB has 136 million active retail deposit accounts and serves 92 of the top 100 enterprises in China. CCB operates an extensive national network of approximately 14,500 branches and approximately 12,500 ATMs and is one of the largest providers of residential mortgages in China. CCB had approximately 12% share of total loans and approximately 13% share of total deposits in China at the end of 2004. As of December 31, 2004, CCB had approximately RMB 3,910 billion in assets.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving 33 million consumer relationships with more than 5,800 retail banking offices, more than 16,700 ATMs and award-winning online banking with more than 13 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 150 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 85 percent of the Global Fortune 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.


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