Argentina has given approval for the Industrial and Commercial Bank of China to take control of the local operations of South Africa's Standard Bank following a 600 million dollars deal last year, the Chinese lender said on Sunday.
ICBC, the world's biggest bank by market value, will take 80% of commercial lender Standard Bank Argentina and its two affiliates, asset manager Standard Investments and commercial service provider Inversora Diagnol. Standard Bank will have its stake in all three firms reduced to 20%.
The agreement had already received approval from the South African Reserve bank and by the Chinese Banking Regulatory Commission.
This makes ICBC the first Chinese lender to enter Latin America's third-largest economy, where President Cristina Fernandez ordered banks in July to lend nearly 15 billion pesos 3.1 billion dollars by year-end to finance investment in production.
The Argentine investment by ICBC is a response to Beijing's call for its state-owned enterprises to expand overseas. The bank's overseas assets rose 21.5% to 154.5 billion dollars at the end of September, and had a non-performing loan ratio of 0.45%, it said in a statement. By comparison, ICBC overall NPL ratio was 0.87% at the end of September.
The local Standard Bank was made up of 25% belonging to the Argentine families Werthein and Sielecki and the rest with Standard Bank South Africa. Under the deal the Argentines sell their full share and the South Africans 55% of their 75%.
In a release the bank said that all 99 branches and staff (3.248) will continue operating normally and serving the 911.000 individual clients; 30.000 companies and 1.500 corporations.
ICBC has 16.825 branches in China, 252 international subsidiaries and 1.591 correspondent banks worldwide plus a range or electronic and telephone financial services. According to June 2012 data ICBC has 4.37 million corporations as clients and 292 million individual clients.