ICBC May Complete Standard Bank London Deal This Year, Sky Says

Industrial & Commercial Bank of China Ltd. may this year complete talks started in 2012 to buy Standard Bank Group Ltd.’s London-based commodities and foreign exchange trading divisions, Sky News reported.

ICBC, China’s biggest lender, resumed talks in recent weeks after putting them on hold for “several months,” the U.K.- based broadcaster said on its website yesterday, citing an unidentified person close to the situation. The negotiations were paused pending the transfer of political power in the Asian nation this year, Sky said.

The “reignited” talks with Johannesburg-based Standard Bank are at a “detailed stage,” Sky said. The deal may be similar to the one planned seven months ago, with ICBC initially buying a 60 percent stake in the units, with an option to increase its holding, it said.

ICBC, the South African bank’s largest shareholder, and other Chinese lenders are expanding abroad as the growing number of Chinese companies in overseas markets boosts demand for offshore services amid tougher competition at home. The commodities and foreign exchange stake would further cement ties between the banks.

State-controlled ICBC’s overseas expansion began in December 2006 when it acquired 90 percent of PT Bank Halim Indonesia, followed by a 79.9 percent stake in Macau’s Seng Heng Bank Ltd in 2007.

In March 2008, ICBC bought 20 percent of Standard Bank, Africa’s largest, for $5.4 billion, in the biggest overseas acquisition by a Chinese bank. ICBC purchased 80 percent of the South African lender’s Argentine assets last year.

Chinese banks including ICBC are also seeking to profit from the country’s demand for precious metals and other commodities. A stake in the Standard Bank unit could build on the full membership ICBC won earlier last year in the London Bullion Market Association.

Before it's here, it's on the Bloomberg Terminal.