This week Bank of America announced it was buying a 19% stake in China Construction Bank,

[Hannah Bell]

doubling its previous position.

BoA has bought a lot of stuff in the last couple of years, most recently the "failed" Countrywide & Merrill Lynch franchises.

It's getting bailout $$, & holds a ton of derivatives. But it's still buying more stuff.

So I checked into the history.

If I have this right:

The China Construction Bank is China's second-biggest bank, & 4th-biggest in the world.

It's publicly traded, but owned by the government holding company Huijin Investment Co., which in turn is owned/managed by the China Investment Corporation (CIC), the world's 4th largest sovereign
wealth fund: 1.9 trillion under mgt.

CIC invests China's forex reserves. It has, e.g., a 9.9% stake in Morgan Stanley, 3 billion in the Blackstone Group - & is managed by folks associated with the Ministry of Finance.


Next, BOA. Today's BoA is the product of many mergers & acquisitions.

BoA began from the 1929 merger of San Francisco's Bank of Italy & LA's Citizens Bank (BoA-LA). The merged entity financed, e.g., the Golden Gate Bridge & Walt Disney.

But re the CCB buy, more interesting is some of its acquisitions history.

In 1992 BOA merged with LA-based Security Pacific. One of SP's holdings (since 1971) was the Bank of Canton (renamed Security Pacific Asian).

Bank of Canton (1912) was a Hong Kong-based bank founded with San Francisco Chinese capital, most notably the Fok family's.

In 1935 it went bankrupt & was reorganized by TV Soong, with the Foks & Soong's brother ending up in leadership roles.

TV Soong was one of the famous Soong family.

His father "Charlie" immigrated from Hainan to the US, found a rich southern benefactor who sent him to Duke & Vanderbilt Universities, then back to China, where he made money with capital from his benefactor, married into an elite family, & financed anti-Manchu activity.

He had 6 kids, all educated in elite US schools.

3 sons, all financiers, two based in China & 1 in NY. They also financed revolutionary activity, & were tied up with China's "Mafia" - whose activities were protected by the foreign colony in Shanghai.

http://en.wikipedia.org/wiki/Green_Gang

Plus 3 daughters: 1 married Sun Yat Sen, another Chiang Kai Shek, & another HH Kung, the richest man in China.

Their story continued: two of the widows moved to NY & with other relatives spearheaded & financed the "China Lobby". The other daughter stayed in China & supported Mao. She's considered a
heroine of the revolution.

http://en.wikipedia.org/wiki/Charlie_Soong

The descendants are still around. The Soong family was listed by Forbes as one of the richest of the last 2000 years. That's pretty rich.


Back to 1992. Security Pacific & BoA merge, & Bank of Canton/Security Pacific Asia (Hong Kong/Macau) is renamed Bank of America (Asia).

In 1998 Bank of America was acquired by the North Carolina-based (started with tobacco & cotton $) NationsBank. It was the biggest merger up to that time, as BOA was huge, & NationsBank had, in a
(miraculous?) growth spurt, recently moved from being the 2nd biggest bank in NC to a national player.

They kept the BOA name for the combined operation.

In 2005, the new BOA bought a 9% stake in the IPO of China Construction Bank.

In 2006, BOA sold BOA (Asia), i.e. Bank of Canton, to CCB for 9.7 billion, the biggest deal ever for a PRC bank.

http://english.peopledaily.com.cn/200608/25/eng20060825_296715.html


And this week, BOA announced it was doubling its stake in CCB.

http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2008/1
1/bank_of_america.html?chan=top+news_top+news+index+-
+temp_global+business


Last thing. NationsBank, which bought BOA, was a North Carolina Bank run mostly by North Carolinians.

Here's the man who took over BOA. He was actually born in SC, but started his banking career in NC - on his father's advice & his father's connections: the family having been in the banking biz in
the Carolinas since 1886.

http://www.knowitall.org/legacy/laureates/Hugh%20L.%20McColl.html


Finally, guess where the "poor immigrant" Charlie Soong found his rich benefactor?

North Carolina. Planter, industrialist, Duke University founder - & banker - Julian Shakespeare Carr. Bull Durham tobacco was his most well-known product.

http://en.wikipedia.org/wiki/Julian_Carr_(industrialist)


Funny, the twists & turns of history.

[fasttense]

1. So will the Bank of America change its name to Bank of China? n/t

[Hannah Bell]

2. maybe they will, at some point. :>)

I just thought it was interesting that they're buying chinese banks while taking US tax $.

and the fluid boundaries between "chinese" & "us" banks & their owners generally.