Shareholder control enables ICBC to follow its Chinese clients across the globe
When Industrial and Commercial Bank of China (ICBC) bought a majority stake in Standard Bank plc in London in February 2015 for US$690 million, it then stated it has ambitions to obtain banking operations around the world and to follow its Chinese clientele wherever they are based. Controlling Standard Bank of South Africa through the London parent was seen as the opening of the door to the African continent.
That intended relationship was visibly cemented between Standard Bank Namibia and the local Chinese business community when the bank’s Chief Executive, Vetumbuavi Mungunda recently hosted prominent Chinese businessmen at a formal dinner.
This week Standard Bank Namibia said its guests were keen to hear about the latest offerings, and to be able to deal with the local bank as an ICBC proxy in Namibia.
“The marriage of ICBC and Standard Bank creates a platform to serve the growing demands of Chinese clients for global commodities, fixed income, currency and equities while continuing as a distribution platform for African risk” according to Standard Bank Namibia.
This union also allows for the Chinese community to transact in Renminbi, which has vast benefits such as realising significant savings when US dollar conversion costs and liquidity constraints are removed. The bank claims it also promotes price transparency and reduces the cost of international trade.
Despite the Chinese international currency, the Renminbi constituting only 5% of the so-called Special Drawing Rights of the International Monetary Fund, Standard Bank Namibia deemed it fit to open Renminbi cash exchanges in Windhoek, Walvis Bay and Swakopmund early in 2016.
At the dinner, Standard Bank’s Mary Liu, who is based in South Africa, gave a presentation on the new Africa China Banking Centre (ACBC) in Johannesburg whose function it is to link African and Chinese clients with China’s highly networked digital banking and customer knowledge systems.
“The ACBC is the first entity of its kind. It provides a virtual hub that connects Africa and China, online banking services, integrates Personal and Business Banking needs and facilitates win-win partnerships,” Liu explained.
Namibian Chinese trade has grown steadily with Namibian exports increasing from N$939 million in 2011 to N$1.9 billion in 2014. This figure is set to rise exponentially as the biggest Chinese investment in Namibia to date, the Husab Uranium mine ramps up production to full capacity during this year. All the uranium oxide produced at Husab are destined for export to China since the mine belongs to the Chinese Government.
Pictured are Standard Bank’s Chief Executive Vetumbuavi Mungunda (standing back left) and the Regional Chief Executive for Southern and Central Africa, Pindie Nyandoro (front left) with Chinese business leaders at a dinner hosted by the bank for the local Chinese business community. Mary Liu of Standard Bank’s Africa China Banking Centre in Johannesburg, stands centre front.
