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Bank of America is purchasing a 9% stake in China Construction Bank (CCB) for $3 billion, plus the option of increasing its stake in later years.

"This investment is aimed at creating a long-term benefit by partnering with the best positioned bank in China, which is one of the fastest growing economies in the world with 1.3 billion consumers," stated Bank of America chairman and CEO Kenneth D. Lewis.

CCB, which is the second largest commercial bank in China, has about $472 billion in assets and $422 billion in deposits. It has a national network of 14,500 branches and business relationships with 92 of the top 100 enterprises in China.

"CCB has undergone an impressive transformation in the last several years," he added. "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."

CCB, which is China's second largest mortgage lender, is currently majority owned by China SAFE Investments Limited, an entity of the country's government.

"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," said CCB chairman Guo Shuqing.

"The most fundamental and challenging task in transforming CCB is to establish a culture that is customer centric and market driven," said Shuqing. "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."

If CCB lists its shares on the Hong Kong Stock Exchange later this year as expected, it will become the first of the Big Four state-owned banks to gain significant public ownership.

According to a press release, Bank of America will make an initial purchase of CCB shares from China SAFE Investments for $2.5 billion and an additional purchase worth $500 million at the time of the listing. Bank of America also has the right to bring its aggregate ownership as high as 19.9 percent over the next five-and-one-half years.

"This investment is structured in a very similar way to our highly successful investment in Banco Santander Serfin in Mexico and should create similar benefits," said Lewis. "We have said that we liked the Serfin investment and would be interested in entering into another such transaction. It makes sense, if you are looking to tap into economic growth, to consider an investment in China."

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.