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 | Standard Bank receives R36.7 billion equity investment |  |  |
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3 March 2008
Standard Bank today boosted its capital base by R16 billion following the finalisation of its strategic partnership with the Industrial and Commercial Bank of China Limited (ICBC), the world's largest bank by market capitalisation. Standard Bank and its shareholders have, in turn, received a R20.7 billion payout.
Says Standard Bank Group Chief Executive, Jacko Maree: "I am delighted that we have completed our strategic deal within agreed time lines, substantially strengthening our capital base. We welcome ICBC as a 20% shareholder of Standard Bank. This transaction will help transform Standard Bank from a regional player to an international player. The positive impact that this partnership will have on the future growth and development of Standard Bank is very exciting. It has given us access to capital which will enable us to continue growing and expanding in South Africa, Africa and internationally."
Today saw the cash settlement of the deal and the issue of new shares. ICBC has acquired 11.11% of the current issued share capital of Standard Bank Group from Standard Bank shareholders at a price per share of R136.00. Standard Bank in turn issued new shares, representing 11.11% of its share capital, which ICBC acquired at a price per share of R104.58.
The R16 billion cash injection further strengthens Standard Bank's tier 1 capital position, especially given the current volatility and uncertainty in world markets.
Standard Bank is now well positioned to serve as a gateway to the growing trade and investment flows between China and Africa. China is Africa's third largest trading partner with trade between the two regions expected to increase to well over USD100 billion by 2010.
ICBC has more than 180 million personal banking customers and 2.5 million corporate banking customers. It has over 16 000 branches and outlets in the People's Republic of China and nearly 100 branches in the rest of the world.
ICBC Chairman Jiang Jianqing says: "I believe that ICBC and Standard Bank are a perfect match. The strategic co-operation between the two sides will be a combination of giants: between Asia's largest bank and Africa's largest bank."
Dr Jiang said that ICBC would not only support Standard Bank's expansion of its global networks, but would also join with Standard Bank in expanding overseas where appropriate.
An ICBC/Standard Bank Group Strategic Cooperation Committee has been established and will meet quarterly. "This committee has equal representation with the first joint chairmen being ICBC President Yang Kaisheng and myself," says Maree.
The committee will be responsible for the development, supervision and implementation of strategic initiatives. The strategic cooperation between Standard Bank Group and ICBC is expected to cover broad areas of cooperation in China, Africa and other international locations.
Standard Bank and ICBC are finalising the terms of a USD1 billion global resource fund. The banks will each invest USD200 million, with the rest being made up of third party funding. The fund will focus on selected opportunities in Africa and China, specifically on the mining, metals, oil and gas industries. The term of the fund is 10 years.
"This investment will put us on an accelerated growth path and will assist in our ability to deliver on our objectives and vision of becoming a leading global emerging markets bank," says Maree.
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