Bank of America is selling a 5.8% stake worth about $7 billion in China Construction Bank to help raise a $34 billion capital gap found by the stress test, the Charlotte Observer reports. This amounts to roughly one-third of its current 17% stake in the Chinese lender.
In January, BoA sold a $2.83 billion stake in the bank, which it began investing in, in 2005.
Burt Greenwald, president of B.J. Greenwald Associates, said it makes sense for the bank to sell its mutual fund arm, since affiliated products are seen to have conflicts of interest.