Standard Bank, ICBC to seek joint bank buys

Standard Bank Group, South Africa’s top lender and 20% owned by the Industrial and Commercial Bank of China (ICBC), will explore global banking acquisition opportunities jointly with its Chinese partner, a senior executive said on Thursday.

Craig Bond, former chief executive of Standard Bank Africa and currently chief executive of Beijing-based Standard Bank-ICBC Ventures, also said the two banks were working with clients on 80 potential investment and acquisition deals by Chinese companies in Africa.

Mining and infrastructure projects in Congo and Angola are of particular interest to Chinese clients, Bond told Reuters in an interview on the sidelines of a banking forum.

“For example, a Chinese company wants to buy a mine in Congo, then we’ll provide dollar funding and other services and we’ll do an IPO [initial public offering] of the mine, maybe in London later,” Bond said.

“ICBC gets the customers and ICBC introduces them to us and there’s also the other way round,” he said, adding that ICBC was also helping an African oil firm to launch its business in China.

In March, ICBC and Standard Bank signed a final agreement to jointly set up a $1-billion global resource fund and Bond said similar joint deals were now under discussion with ICBC.

Seeking resources
“We realise that the American and European influence on Africa has started to be diminished,” Bond said.

China and India are playing an increasingly important role in Africa as they seek resources to support rapid economic growth, he added.

Standard Bank and ICBC are also working on joint marketing, customer referrals and information exchanges on a global scale.

Standard Bank may consider buying a stake in ICBC in the future to bolster their ties, he said, but there is no specific plan at present.

ICBC’s existing foreign shareholders include Goldman Sachs, American Express and Allianz Group.

ICBC, which overtook Citigroup last year to become the world’s biggest bank by market value, set up Standard Bank-ICBC Ventures in Beijing with its South African partner to promote joint strategic initiatives.

Bond, who will be based in Beijing and occupy an office next to ICBC chairperson Jiang Jianqing, said he would work with senior ICBC executives on a day-to-day basis.

Standard Bank plans to recruit staff from ICBC to post in its branches across Africa, although Bond said many Chinese staff were hesitant about relocating to Africa.

“Doing business in Africa is tough but the market can also be very profitable,” he said.

ICBC executives said at an annual general meeting in Hong Kong on Thursday that the bank plans to be the world’s most profitable bank in five years.

ICBC paid about $5,6-billion for its 20% of Standard Bank, making the deal so far the largest foreign investment in Africa.—Reuters

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