BofA CEO sees big CCB stake despite capital need

NEW YORK (Reuters) - Bank of America Corp (BAC.N: Quote, Profile, Research), ordered by the federal government to find $33.9 billion of capital, plans to retain a large stake in China Construction Bank Corp (601939.SS: Quote, Profile, Research) even as it sells other assets, Chief Executive Kenneth Lewis said.

"It's a strategic partner, and we always want to have a very large ownership position," Lewis said on a conference call hosted by Calyon Securities.

CCB is China's second-largest bank. Bank of America owns a roughly 16.7 percent stake and was freed to sell some of it following last week's expiration of a lockup period.

U.S. regulators ordered Bank of America to raise capital after results of a "stress test" showed the largest U.S. bank needed a bigger cushion against a deep economic downturn.

Bank of America has said it plans to raise $17 billion of common equity, including from converting some preferred shares into common stock; $10 billion from selling assets including First Republic Bank and the Columbia asset management unit; and $7 billion from other sources.

Charlotte, North Carolina-based Bank of America has struggled with mounting credit losses, especially in credit cards, and a controversial acquisition of Merrill Lynch & Co.

It has taken $45 billion of taxpayer money from the federal Troubled Asset Relief Program, including $20 billion in January. Lewis said he hopes to start repaying the money in "months, not years."

Lewis, 62 years old, also said he would like to repay some if not all of the federal money before Bank of America installs his successor as chief executive.

He said "we have several people inside the company that I think would be very good successors, all of whom will go unnamed."