Agricultural Bank of China got a boost ahead of its upcoming IPO by establishing a strategic partnership with Standard Chartered, the emerging markets specialist.
The alliance will take advantage of the growing intra-Asia and Asia-Africa trade corridors and focus on retail and wholesale banking opportunities in China and abroad. In particular, it will enable Chinese businesses to access international capital markets. The UK bank is also rumoured to be investing $500 million in Agricultural Bank of China’s IPO, which is expected to raise as much as $23 billion.
The partnership will give Standard Chartered much-needed scale in China, where it lags behind other foreign banks such as HSBC. Standard Chartered has 54 outlets in China compared with 100 for HSBC, including 22 branches.
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| "Since 1998 the question has been: how do we get that scale to compete because we need to be more local than the international banks and more international than the locals?" |
"Since the Asian financial crisis, Standard Chartered has held a long-standing philosophy that the future of banking in our markets is about local scale," says Mike Rees, chief executive of the wholesale bank at Standard Chartered.