Johannesburg - Standard Bank has announced the latest step in its long-term strategy of selling off its non-African operations with Friday’s Stock Exchange News Service statement advising shareholders that it was engaged in discussions relating to the potential disposal of a controlling stake in its global markets business outside Africa.
The proposed transaction will focus on the lender’s London business, Standard Bank plc. “Such a transaction, should it be concluded, would result in the Standard Bank Group retaining a minority shareholding interest sufficient to maintain the continuity of access for the group’s African network and clients,” the announcement said.
Johann Scholtz of Afrifocus Securities said the announcement was not unexpected as the bank had been aggressively reducing its operations outside Africa. He said Standard Bank had had the London business for a while. “It is the remnants of their previous global ambitions,” said Scholtz, adding that although “meaningful” from a capital perspective it was not from a profit perspective.
One speculated purchaser of the London business is the Industrial and Commercial Bank of China (ICBC), which holds a 20 percent stake in Standard Bank, making it its largest single shareholder. A price tag of about $700 million (R7.3 billion) has been mentioned for the London assets. The Financial Times reported that Standard Bank had been in talks with ICBC for more than a year in a bid to reach agreement on the commodity trading business.
Last month, Reuters reported that Standard Bank had agreed to sell its Asian loan portfolio worth around $1bn to French-based BNP Paribas and others. The loan portfolio included around $350m of loans to Mongolian entities.
Last year, Standard Bank finalised the sale of 80 percent of its business in Argentina to ICBC. It also sold off stakes in its units in Turkey and Russia.
As it sells off non-African operations, Standard Bank is continuing to build up its presence in Africa. In August, the bank announced that it was setting up representative offices in Ethiopia and Ivory Coast. The bank began developing its franchise throughout the continent in the early 1990s and has operations in 18 countries.
Ahead of the recent acquisition of Barclays’ African operations by Absa, Standard Bank generated a higher proportion of profit from Africa (outside South Africa) than any other bank in the country.
On Friday, Standard Bank’s share price firmed 50c to close at R124.51. It is 15 percent up on the year and is near its 12-month high of R127.69, which was reached last month.
Standard Bank’s 12-month performance puts it in second place to Nedbank, which has advanced 19 percent over the period. First Rand is up 11 percent on the year, and Barclays Africa Group is the poorest performer of the four big banks, with a gain of just 1.2 percent on the year. - Business Report