Slow burn

30 January 2014 By John Foley Follow @johnsfoley

The Chinese lender is buying 60 pct of Standard Bank’s UK trading business. Negotiations took over a year, and ICBC has over a decade to take full control. Slow decision making can mean missed opportunities, but caution may protect China’s banks from high-profile own goals.

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Industrial and Commercial Bank of China agreed to buy a 60 percent stake in Standard Bank’s London-based global markets business, focusing on commodities, fixed income, credit and equities trading.

The price would be the subsidiary’s book value minus $80 million, the South African lender said. Based on the unit’s book value on June 30 2013, the price would be $765 million. The companies expect the deal to complete in the fourth quarter of 2014.

ICBC will have the right to buy a further 20 percent of the division over a five year period, starting two years after the completion date. Starting six months after that, Standard Bank will have a five-year option to sell ICBC the remainder.

China’s biggest bank by assets owns a 20 percent stake in Standard Bank, which on Jan. 16 named former ICBC president Yang Kaisheng as its vice chairman.

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