B of A forecasts additional $3b writeoff

Don't be so negative:


BofA set to gain $30bn on CCB stake

By David Wighton and Ben White in New York
Tuesday Nov 13 2007 13:50
Bank of America (NYSE:BAC) on Tuesday said it was sitting on a potential gain of more than $30bn on its investment in China Construction Bank, highlighting the paper profits some western banks have made on holdings in their Chinese counterparts.

BofA paid $3bn two years ago for an 8.5 per cent stake in CCB and an option to increase to 19.9 per cent at a very low price. The bank plans to record a gain of about $16bn on its existing stake in the fourth quarter.

"On paper we have a potential gain in excess of $30bn," said Joe Price, BofA's chief financial officer, adding that it would be able to cash in some of its holding over the next 2 to 3 years.


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