Chinese bank may delay South African opening on coronavirus
JOHANNESBURG - China’s Bank of Communications Co. may delay the opening of its South African branch after the outbreak of the coronavirus restricted travel between the countries.
While officials from the lender were granted their work visas last week, there’s a chance that the launch date could be postponed because of a travel ban instituted by South Africa this week, the Shanghai-based lender said in an email. Bank of Communications had previously intended to be up and running in May or June and received all regulatory approvals, including a license from the South African Reserve Bank, earlier in the year.
Planning for the branch largely depends on South Africa’s next steps on its travel policies. President Cyril Ramaphosa announced a raft of precautions to contain infections, including the cancellation of visas, closing of schools and limiting the country’s number entry points. Travel bans were imposed on people who had recently visited some of the hardest-hit nations as the country reported 150 confirmed cases of Covid-19.
China’s sixth-largest lender by assets, in which HSBC Holdings Plc is the biggest shareholder after the Chinese government, is still pushing ahead with its South African plans as the spread of the virus upends global markets and weighs on economies around the world.
Bocom, as the bank is also known, said the opening of a wholesale bank in Africa’s most-industrialized economy will be used to extend its international footprint. The company will be entering a market dominated by South Africa’s four biggest lenders -- including Standard Bank Group Ltd., which is 20% owned by Industrial and Commercial Bank of China Ltd., and FirstRand Ltd. -- while international banks such as Goldman Sachs Group Inc. and Citigroup Inc. also operate in the country.
The 112-year-old lender sees opportunities in the country because of its inclusion in BRICS along with Brazil, Russia, India and China, Bocom said. The Johannesburg branch will target expanding trade between South Africa and China by offering corporate loans, trade finance, wholesale deposit-taking and treasury services.