August 31, 2011 (Chinavestor) When news that Bank of America (NYSE:BAC) trimmed its stake to just 5% in China Construction Bank (HKG:0939) broke out, investors cheered in the U.S. The nation's largest commercial bank by number of branches and clients netted in $8.3 billion on top of Warren Buffet's $5 billion investment a few days earlier. But that's the end of the good news. And here is the other side of the coin.
Chinese financial institutions have been increasingly profitable since they went public, a trend that is about to continue. Commercial and Industrial Bank of China (HKG:1398), the largest Chinese financial institution, reported a net profit of $8.4 billion just for the second quarter! China Construction Bank (HKG:0939), the second largest lender, made $7.3 billion while Bank of China (HKG:3988) reported a net profit of $5.2 billion for 2011 Q2. So selling a stake in a golden venture raises a lot of questions.