China: Forward march
After years of tentative steps, China’s banks are poised to expand aggressively in Latin America
By Elliot Wilson
In November 2007, Industrial and Commercial Bank of China
dropped a bombshell. Its first large, long distance acquisition
was for a fifth of South Africa-based Standard Bank, for $5.6
billion. Until then, Beijing's largest lender by market cap and
revenues had only made a few small purchases near China's
borders. Some analysts said the deal was a game-changer -
others, a risk too far.
Neither ICBC nor Standard Bank has ever given details of
revenues or profits from the deal. But for both sides, the deal
is seen as a blinding success: ICBC gained access to
economically resurgent sub-Saharan Africa. Standard Bank in
turn has leveraged its relationship with ICBC as well as
Beijing's leading policy lender, China Development Bank.
But the deal's unexpected success raised a question: why has
it taken so long for Chinese banks to enter Latin America, that
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.