Thread: Charlotte's Bank of America Invests in Chinese Bank

Another example of unbridled globalism from the pages of the Charlotte Disturber. I predict they will rue the day they wandered into this nest of snakes - Scarecrow


BofA invests $3 billion in China bank

Wins entry to vast, risky market

BINYAMIN APPELBAUM & RICK ROTHACKER

Bank of America Corp., seeking to profit from the booming Chinese economy, will spend $3 billion for a 9 percent stake in one of China's largest banks, the company said late Thursday.

The Charlotte-based bank said it will purchase $2.5 billion in shares of the state-owned China Construction Bank and another $500 million when the Chinese bank sells shares to the public later this year.

It is the largest foreign investment in a Chinese bank.

The deal takes Bank of America into a booming economy with huge growth potential -- and almost none of the safeguards that protect corporate investments in the American marketplace.

"I think the analogy is to a poker game," said Alenka Grealish, a manager with Celent, a Boston-based banking consultancy. "You pay an entry price to have a chance at some unknown upside."

Bank of America Chairman Ken Lewis flew to China to sign the deal in a ceremony this morning -- still Thursday night in Charlotte -- with the Chinese bank's chairman, Guo Shuqing.

"This investment is aimed at creating long-term benefits by partnering with the best-positioned bank in China," Lewis said in a statement that ended months of speculation about the bank's interest in China.

Bank of America, the second-largest American bank with assets of $1.2 trillion, posted a profit of $14.1 billion in 2004. The China Construction Bank, one of four principal state-owned banks with assets of $470 billion, posted profits of $6.1 billion last year.

The Chinese bank is emerging from turbulence. Its chairman was convicted in 2003 of accepting bribes. Around the same time, it received a $22.5 billion government bailout to help it reduce bad loans.

Since then, the Construction Bank has issued its first shares to investors, hired an independent board of directors and otherwise tried to behave more like financial institutions in capitalist economies.

But in March the chairman's successor was forced to resign amid renewed bribery allegations.

In a conference call earlier this year, Lewis said he was looking for "progress on credibility of the numbers" in China.

Still, Bank of America has been moving steadily to expand its presence. It now has four branch offices in China after opening a second location last year in Shanghai -- its first consumer and commercial office.

And in April, Lewis visited the country at the invitation of the government and met with Chinese Vice Premier Huang Ju.

The attraction is obvious.

The Chinese market is huge, and some day it could be wealthy. The China Construction Bank has issued more than 130 million bank cards, according to its Web site. That is four times the total number of customers claimed by Bank of America, the largest consumer bank in America.

"With a growing middle class buying condos and homes, there will be a need for consumer loans as well as credit cards," said Gary Locke, a former Washington governor who now works in the China practice at the Seattle law firm of Davis Wright Tremaine.

The size of the investment is relatively small for Bank of America. The company acquired FleetBoston Financial Corp. last year for $47 billion. It also paid $1.4 billion for a credit card processing company in a little-noticed transaction.

And Bank of America checked the books of the Chinese bank carefully before finalizing its investment, said bank spokesman Bob Stickler.

"The Chinese are working very hard to bring their major banks into the international financial community," Stickler said. "We believe the bank is on the right track."

International expansion is critical for Bank of America because it controls about 10 percent of U.S. deposits. Under federal law, it can't cross that line as the result of an acquisition. The bank can only expand domestically by building new branches and chasing customers.

In 2003, in a similar investment, the Charlotte bank spent $1.6 billion to acquire a 24.9 percent stake in Mexico's Grupo Financiero Santander Serfin.

Now the company is following some of the world's largest banks into China. HSBC, an English bank with Chinese roots (the name is an acronym for Hong Kong & Shanghai Banking Corp.), last year spent $1.75 billion for 20 percent of China's fifth-biggest lender, Bank of Communications.

Citigroup, the world's biggest financial services company, in 2002 bought a 4.6 percent stake in China's ninth-largest bank, Shanghai Pudong Development Bank Co.

Bank of America has an option to increase its stake to 19.9 percent over the next 5 1/2 years. Foreign investors are not allowed to own more than 20 percent of a Chinese bank, and total foreign ownership cannot exceed 25 percent.

Construction Bank

The Construction Bank was created by the Chinese government in 1954 to manage funding for public works projects. It remained an arm of government until 1994, when its primary focus was shifted to the private sector as part of broader economic reforms.

It was the first Chinese bank to offer automobile loans, according to its annual report. The company also boasts that its "Happy Family" mortgage loans have put 5 million Chinese families into homes.

The bank employs more than 410,000 people at over 21,000 branches. By contrast, Bank of America has about 175,000 employees and about 5,800 branches -- but almost twice as many ATMs.

Binyamin Appelbaum: (704) 358-5170; bappelbaum@charlotteobserver.com
http://www.charlotte.com

Like I said, Folks....

DON'T SPEND, SAVE!!

Remember the other part of it?

1) Pay off your credit cards as fast as possible, Whatever It Takes.

2) DO NOT USE YOUR DEBIT CARD, the banks make money on every transaction from the vendors. Get your cash from the bank for the week.

3) Put your "savings" in a small bank.

4) Postpone all major expenditures.

5) Buy only essentials...and spread those dollars around to a variety of vendors....don't "enrich" any one vendor. Members of ALIPAC are excepted.

6) Fill your tank only half full, and when you buy gas, buy it the next morning instead of that evening. This will bring fuel prices down dramatically. It only takes 5 minutes to buy gas. Do this little thing to save your country.

7) Put Bank of America on the OBL-List with Citigroup, Wells Fargo, and Wachovia.

The "money", the $3 billion they are using to "buy" into a "STATE CONTROLLED BANK IN CHINA" is your money....is that what you expected BOA to do with the profits....YOU MADE THEM? I think not.

It is payback time....starve them out.

BOA knows better than to believe China is letting them buy into their "STATE CONTROLLED BANK".

China just bought Bank of America.

I have one word for BoA -TRAITORS!!!

Should be renamed to the "Bank of Globalism."

http://www.austintek.com/outsourcing/

2.1. Importing cheap labor: the H1-B program

Because of the desperate shortage of IT workers that political contributors were finding in the early 1980's, the IT industry realised that it could get cheaper labor if it offered greencards as part pay to low wage Asian immigrants. Thus congress enacted the H1-B program, which allowed employers to import workers to fill IT positions.

Many firms, including Bank of America (the Carolinas biggest employer) admit that they require their american workers to train their foreign replacements. This at least shows that the american workers do have the qualifications for the job, while it's the replacements that need the training. The american workers were paid 70-90,000$, while their H1-B replacements were paid $39,184. (see How to Underpay an H1-B http://www.programmersguild.org/archive ... derpay.htm ).

2.3. Outsourcing

As we've seen, the IT industry doesn't release the number of jobs it ships overseas. However whether the job is contracted to a foreign company or to a US subsidiary overseas, an american job is lost. Companies that are used in outsourcing are TATA, WIPRO and CGI-AMS (3$G/yr, 25,000 employees).

Forrester Research estimates that by 2015 473,000 IT jobs will be moved overseas.

The Bank of America contracts with TATA, Dell has transferred call centers to India, Oracle has 2 research centers in China. The State of California hopes to save $600M/yr by contracting services to CGI-AMS.

Right, Lost Mummy. I wonder how long it will be before operations currently conducted in Charlotte and other places in this country will be moved to Shanghai, Beijing and other Chi-com towns. Brings a whole new meaning to the phrased "being Shanghaid."

You know, we bring light to those who support illegal immigration, are their banks and corporations that don’t help out the illegals that we can list and then support? I only have a couple of banking opportunities around here. One is BA and the other is Wachovia. I would be willing to bank elsewhere even in another city just to make a point of supporting banks that don’t support illegals.

It might be difficult to determine who supports illegal immigration and who doesn't in the banking world. Most of them will toe the politically correct line every time.

I guess the easiest way would be to find out if they accept matricular cards for id.

Heck, they at BofA they probably accept Communist Party cards!

Originally Posted by Judy

Like I said, Folks....

DON'T SPEND, SAVE!!

Remember the other part of it?

1) Pay off your credit cards as fast as possible, Whatever It Takes.

I don't have any Credit Cards.

Originally Posted by Judy

2) DO NOT USE YOUR DEBIT CARD, the banks make money on every transaction from the vendors. Get your cash from the bank for the week.

The only thing I use the Debit Card for is to buy my Rx's from Canada. (at half price!) 3 months at a crack.

Originally Posted by Judy

3) Put your "savings" in a small bank.

OK.

Originally Posted by Judy

4) Postpone all major expenditures.

Done

Originally Posted by Judy

5) Buy only essentials...and spread those dollars around to a variety of vendors....don't "enrich" any one vendor. Members of ALIPAC are excepted.

Done

Originally Posted by Judy

6) Fill your tank only half full, and when you buy gas, buy it the next morning instead of that evening. This will bring fuel prices down dramatically. It only takes 5 minutes to buy gas. Do this little thing to save your country.

I own a gas guzzlin' evil SUV. When it gets down to a quarter tank, I fill it up to minimize corrosion from condensation. It lasts about 4 to 6 weeks a tank . . .

Originally Posted by Judy

7) Put Bank of America on the OBL-List with Citigroup, Wells Fargo, and Wachovia.

The "money", the $3 billion they are using to "buy" into a "STATE CONTROLLED BANK IN CHINA" is your money....is that what you expected BOA to do with the profits....YOU MADE THEM? I think not.

It is payback time....starve them out.

BOA knows better than to believe China is letting them buy into their "STATE CONTROLLED BANK".

China just bought Bank of America.

I did that years ago. Back in 1980 B of A gave me grief and I gave them directions to hell. They did not want to allow me to open a checking account without a savings account. The interest offered was crap.