CCB exit is end of era for overseas lenders

Bank of America's complete exit from China Construction Bank, the mainland's second-largest bank by assets, marks the end of major foreign banks' investment in the Big Four state-owned lenders after Beijing kicked off industry reforms about a decade ago, with the exit process having started a few years ago.

The US bank's sale of its holdings in CCB came just about four months after Goldman Sachs sold its remaining shares in Industrial and Commercial Bank of China, the nation's biggest bank.

Softening economic growth in China had dragged down the potential returns on the country's banks, and harmed their asset quality, analysts said. This pushed foreign banks, faced with tough capital requirements, towards the exits.

"Concerns about the magnitude of the mainland economic slowdown and massive write-offs from bad loans add to pressure on the foreign firms to reduce the investment in mainland banks," said Liu Ligang, the chief economist at Australia's ANZ Bank.

Liu said the foreign banks might also need to raise money to boost capital for home-market operations.

Bank of America sold the stock because of the increasingly stringent capital requirements in the United States, CCB said in a statement.

"BofA has to offload the shares to refill its own capital," it said, noting the sale was completely unrelated to any concerns about CCB's outlook.