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China Construction Bank acquires BoA HK and Macau

China Construction Bank acquires BoA HK and Macau

(28 August 2006 – China) China Construction Bank announced it would acquire Bank of America Hong Kong and Macau divisions for HK$9.71 billion (US$1.24 billion). The bank is China’s third biggest lender and is ranked tenth largest bank in the world by market value. The acquisition comes amid talk of the bank’s expansion outside mainland China. The bank’s chairman Guo Shuquing said that the bank would look for expansion opportunities worldwide with Europe and the United States both in sight.

Construction Bank announced its half year profit was down 18 percent, with earnings falling from 28.3 billion yuan in the first half of 2005 to 23.3 billion yuan in the first half of this year.

The bank is China’s leading mortgage lender and the weaker earnings may partly be due to the recent lending restrictions and higher interest rates, introduced by the regulators in an attempt to cool off China’s booming housing sector.

Bank of America has an 8.5 percent stake in China Construction Bank which was listed on the Hong Kong stock exchange in late October 2005.

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