Standard Bank has concluded a partnership agreement with Industrial and Commercial Bank of China (ICBC), in which the Chinese bank will acquire a 20% stake in the Standard Bank group.


The deal will result in a R36.7bn (US$5.5bn) equity investment into Standard Bank, marking the largest direct investment made into South Africa.


Foreign ownership of Standard Bank stands at around 25%, and will increase to 40% after this transaction is completed. Standard Bank will remain majority South African owned.
The transaction is pending approval from the South African Registrar of Banks, the China Banking Regulatory Commission, the JSE, and Standard Bank and ICBC shareholders.
ICBC chairman Jiang Jianqing comments: “From a strategic perspective, ICBC has been seeking opportunities to expand its international business, in particular in Africa given strong trade linkages and the close and long standing friendship between China and South Africa.  As many of our large clients seek investments in Africa, the demand for cross border financial services is accelerating. Standard Bank with its market leading position in South Africa and a true pan-African footprint represents the best organization with which ICBC can partner.”


Jacko Maree, Standard Bank group chief executive adds: “ICBC shares Standard Bank’s vision about the long-term investment proposition for Africa and, together with Standard bank, hopes to lay the foundation for significant expansion of such trade and investment between its Chinese clients and the African continent.”


The flow of trade and investment between China and Africa has been well-publicised and ICBC believes that one of the best ways of capitalising on these flows is through strategically allying itself with Standard Bank, who already has significant operations across the African continent.

In addition to this partnership, the two banks are looking at the option of launching a global resource fund. This fund would be targeted at a total of US$1bn to be raised from investors, and it will focus on selected opportunities in Africa and China, with particular emphasis on the junior mining and energy sectors. The term of the fund will be set at 10 years.