Bank of America downplays sale of China bank stake

NEW YORK (Reuters) - Bank of America Corp (BAC.N) downplayed on Monday a report it might soon sell some of its stake in China Construction Bank Corp (0939.HK) (601939.SS) to bolster capital.

Bank of America in 2005 paid about $3 billion for a 9 percent stake in the Chinese bank, with an option to boost its stake to about 19.9 percent over five-and-a-half years.

The original stake is worth more than $16 billion, Reuters data shows.

Earlier Monday, the New York Times said Bank of America, Construction Bank officials and Chinese regulators were in talks about a sale of part of the Construction Bank stake, citing a person briefed on the negotiations.

Joe Price, Bank of America's chief financial officer, in an interview, said the bank "contractually" has a lock-up period that doesn't expire until the fourth quarter.

He also said the Charlotte, North Carolina-based bank would "probably" first raise its stake before considering a reduction.

"The ultimate level that we want to get to is something they're comfortable with and we're comfortable with," Price said.

Earlier Monday, Bank of America said its Tier-1 capital ratio, which measures its ability to cover losses, was 7.51 percent as of March 31.

That's above the 6 percent level that regulators say reflects a "well-capitalized" bank, but below Bank of America's 8 percent target.

(Reporting by Jonathan Stempel; Editing by Tim Dobbyn)