South African banking group Standard Bank is trying to sell its stake in the UK-based joint venture with the Industrial and Commercial Bank of China (ICBC), Reuters has reported.
During the firm’s annual results presentation, Standard Bank CEO Sim Tshabalala revealed that the bank is trying to convince ICBC to buy its 40% stake in ICBC Standard Bank (ICBCS).
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Tshabalala said that discussions “have commenced to try and convince them to acquire the asset from us.
“I don’t think we can give a time as to when we will succeed in persuading them.”
Through ICBCS, Standard Bank sought to become a global emerging markets lender, but the losses at ICBCS have impacted its financials in recent years.
The South African lender has been trying to sell its stake in the JV but was bound by its agreement with ICBC.
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By GlobalDataAs per the agreement, Standard Bank cannot exercise its option to divest a 20% stake to the Chinese lender till ICBC uses its option to buy the other 20% stake from Standard Bank.
Tshabalala noted that ICBC’s option has now expired.
Founded in 2015, ICBC holds a 60% stake in the ICBCS, which now faces exposure to risks from entities that are directly and indirectly exposed to the fallout from the Russian invasion of Ukraine.
Standard Bank noted that it has some “limited direct exposure” to Russia and Ukraine.
The lender has warned that geopolitical tensions caused by the Ukraine crisis could potentially impact the markets on the African continent, which could undo the recovery from Covid-19.
