Published on : Feb 25, 2014
The Industrial and Commercial Bank of China Ltd recently announced that it has signed an agreement on January 29 with the Standard Bank Group Ltd. As part of this agreement, the former would acquire a 60% share in the business of Standard Bank Plc which is a London-based business engaged in dealing with stocks, commodities, currencies, as well as bonds. The deal, valued at approximately USD 750 million, will help the ICBC gain access to a wider market worldwide.
ICBC is a 20% shareholder in the SBG. As part of this deal, the bank will largely focus on the flow of cash between China and Africa, besides a number of other emerging markets.
The Chinese bank’s chairman Jiang Jianqing said that with a rapidly growing Chinese economy, there is a pressing need for commodities trading and hedging. Given the implementation of financial reforms such as interest rate and foreign exchange rate liberalization presented a higher need for a transformation in service capabilities as well as innovative business models for banks in China.
The ICBC has also emerged as the largest bank by assets and has recorded among the highest profits through lending in the world. However, this bank isn’t the only one looking to extend its business capabilities to the African continent. There are several other businesses that are looking at Africa as a hot investment destination.
There are very chances that the trade imbalance between Africa and China changing, but this situation will be helped by the growing volume of Chinese investments in Africa, according to market experts. They say that this is only the beginning of a business partnership where higher give and take is expected in the years to come.