Standard Bank Group sees Chinese returning to Africa

DALIAN, China – Standard Bank Group, Africa’s top bank by assets, expects to seal a dozen major lending deals in Africa in cooperation with its China partner in the next year, as resource-hungry Chinese firms begin returning to the continent.

Standard Bank, which is 20 per cent owned by China’s largest bank, Industrial and Commercial Bank of China (ICBC), is working with ICBC on 60 deals on the African continent, China chief executive Craig Bond told Reuters.One in five of those is expected to close in the next 12 months, Bond said in an interview on the sidelines of the World Economic Forum in the northeastern port city of Dalian.Apart from those medium-to-big sized deals, there will also be many smaller transactions, fuelled by the growing number of Chinese firms going to Africa to invest.A year ago, most of those Chinese firms, many in the energy and resource sectors, were focused on projects in Australia and South America with very little attention given to Africa. Since February, however, many Chinese state-owned enterprises have begun to talk to the bank, looking for opportunities in Africa, he said.’I think, definitely, the interest from China has improved and there is a very real desire to go look at real assets and do real deals in Africa,’ Bond said.The African Bank is working on M&A deals in Africa with its Chinese partner in mining, oil and gas and mineral sectors, and there is a huge demand for financing in the infrastructure industry, Bond said.He said his bank does not only serve as financier, but also educates Chinese companies that are often baffled by the complicated political environment and regulation in African countries.Standard Bank and ICBC said in May they would finance the expansion of a coal power station in Botswana for US$825 million over 20 years, the first major deal between the pair.Standard Bank, which serves purely as a consulting firm in China, regards the shareholding by ICBC as both strategic and financial investment.ICBC certainly expects a very good financial return from Standard Bank, Bond said, adding that what is clear is that ICBC made the investment with much more vision.’Without having to open one branch in Africa, they have access to the whole continent,’ he said.Standard Bank has also drawn on its ICBC connection to boost its presence in China, and expects its profit there to double next year.’We conservatively think we’ll make US$50 million this year; we’re on track to do that, and next year we’ll make US$100 million,’ Bond told Reuters.-Nampa-Reuters