Bank of America is considering whether to reduce its stake in asset manager BlackRock, which is viewed as a non-core asset, a source familiar with the situation said on Sunday.
Charlotte, North Carolina-based Bank of America inherited a stake in BlackRock through its 2008-2009 acquisition of Merrill Lynch.
It owns a 34.1 percent economic interest in the asset manager. As of March 31, the bank valued its BlackRock investment at $14.1 billion.
Bank of America has for some time been looking at its non-core assets and weighing whether to sell or keep them, said the source. The BlackRock asset is not considered core, so the bank is also weighing whether that should be reduced, the source said.
Bank of America has been selling other assets. It struck a deal in 2009 to sell a long-term asset management business, part of its Columbia Management division, to Ameriprise Financial for about $1 billion.
It recently reduced its private equity investment business, with the spin-out of its mid-market private equity business, now called Ridgemont Equity Partners.
The Wall Street Journal earlier reported that it was considering reducing the BlackRock stake.
Another factor which may contribute to a decision to sell is that far-reaching rules proposed recently by the Basel Committee of Bank Supervision, known as the Basel III capital requirements, will effectively prevent banks from holding big stakes in other companies.
Bank of America and PNC Financial Services Group may be forced to sell their stakes in asset manager BlackRock under those rules, Reuters reported earlier in August.
In the United States , banks rarely own large chunks of other companies. But Bank of America and PNC — through a unique series of deals — combined own nearly 60 percent of BlackRock, though the asset management company remains independent.
© 2022 Thomson/Reuters. All rights reserved.