Standard Bank Group Limited (SBG) said it has signed the closing documents with Industrial and Commercial Bank of China Limited (ICBC) to cement the completion of the disposal of a 60% stake in Standard Bank Plc on 1 February 2015.
The London headquartered banking group has operated as a wholly owned subsidiary of Standard Bank London Holdings Limited, which is in turn controlled by SBG. Post completion, the joint venture, with operations in London, New York, Singapore, Dubai, Tokyo, Hong Kong and Shanghai, will focus on the global markets business and provide trading services in commodities, foreign exchange, interest rates, credit and equities to clients worldwide.
The transaction proceeds receivable by SBG will be finalised after a post completion audit of Standard Bank Plc, and total gross proceeds of approximately USD 690 million are expected. SBG has ensured that the joint business has sufficient financial resources to support the growth inherent in its joint business plan by making a capital injection of USD 300 million in January 2015, after receiving necessary approvals, to address losses incurred by Standard Bank Plc in 2014, inter alia from aluminium exposures in China.
It is the group’s intention that the proceeds of the transaction will be deployed in furthering the group’s growth strategy in South Africa, and across the African continent, subject to necessary approvals.
Ben Kruger, Chief Executive of SBG, said ICBC is a long-standing strategic partner of SBG, and they were excited by the unique opportunity this transaction offers to our people and our clients.
“The new business unlocks the potential and capacity of our Global Markets business as part of China’s leading banking group, while also recognizing the unique African focus and expertise of our investment banking and transaction platforms. The joint venture will continue to support all trading requirements of SBG’s existing customers with full and uninterrupted access to all distribution channels as they partner with SBG to finance growth and development on the African continent.”
On the other hand, David Munro, Chief Executive, SBG Corporate and Investment Banking, said the transaction further strengthens SBG’s powerful relationship with ICBC.
“China and Africa have an increasingly important shared role in the future of the global economy, and this partnership brings together ICBC’s financial and global reach, with SBG’s deep expertise in Africa, to the benefit of our mutual and prospective clients. SBG’s Africa strategy will create increased flows for the Global Markets business as African corporates increasingly demand access to international markets and international corporates demand access to African opportunities.”