China Construction Bank buys Bank of America (Asia)

China Construction Bank inked an agreement with Bank of America (BOA) to acquire 100 percent of equity interest of Bank of America (Asia) limited, the wholly-owned subsidiary of BOA in Hong Kong, Bloomberg reported. The deal is finalized at 9.71 billion HK dollars in cash (1.24 billion U.S. dollars), gaining 17 outlets with 7.4 billion HK dollars (925 million US dollars) of net assets. Chinese lenders are expanding in Hong Kong to prepare for competition with global banks, after decades of fraud and lax lending controls led to at least 520 billion US dollars in bad loans. Bank of America Corp., seeking access to the world's fourth-largest economy, last year bought a 9 percent stake in the lender for 3.3 billion US dollars and agreed to assist its management. ``Hong Kong is a good market to buy into,'' said David Astor, who helps manage the $94 million Hiscox Far Eastern Financial Fund at Hiscox Investment Management in London. ``In international terms, Hong Kong banks are very profitable, highly regulated and well capitalized.'' The acquisition reflects the growing clout of China's banks. China Construction has a market value of 97.6 billion US dollars, making it the world's 11th biggest bank, ahead of BNP Paribas.