Anyone seeking evidence of a new world order in banking should reflect on Bank of America's sale of a third of its interest in China Construction Bank. Not only do the buyers seem to be all Asian: Temasek Holdings of Singapore, China Life, and Hopu Investment Management, a Beijing-based private equity firm. Not a single western investment bank seems to have been involved in this low-key, $7.3bn private placement.
This is the way China would have wanted it. Previous sales of stakes in its policy banks were slapdash affairs, giving the impression sellers could not exit fast enough. When UBS sold its sub-2 per cent stake in Bank of China in January, for example, 3.4bn shares ended up spread between at least a dozen hedge funds. In China Life and Temasek, Beijing can be assured of long-term holders. And Hopu is the right kind of locust. Set up two years ago by Fang Fenglei, former chairman of Goldman Sachs' securities joint venture in China, it was among about 20 institutions that bought Bank of China shares offloaded by RBS in January. China's appreciation for a more civilised, three-way deal may be reflected in the price – a wider discount than BofA achieved when it sold a smaller piece of CCB in January. Relief at the orderly removal of an overhang sent CCB shares up 2 per cent.
For BofA, every little counts. Required last week to raise $34bn, it has just done more than a fifth of that. Goldman, meanwhile, is in the unusual position of being at the mercy of events rather than master of them. It already owns 5 per cent of one Chinese bank – ICBC – directly, under strict lock-ups. And, as it was an anchor investor in Hopu, it now has indirect exposure to two more. Still, we are long past the point where gweilo bankers call the shots.