Chinese interest in Standard Chartered

by Gill Montia

Story link: Chinese interest in Standard Chartered

Standard Chartered, the UK-based international bank that operates in many of the world’s fastest-growing markets, is receiving interest from the Chinese banking sector.

Senior executives at Industrial and Commercial Bank of China, Bank of China and China Construction Bank are reported to have been in discussion with the Singapore state investment agency, Temasek, over a possible sale of its holding in the bank.

Temasek acquired an 11.5% stake in the bank in 2006 but has since enlarged its holding to 17%.

Standard Chartered, which has a global network of over 1,400 branches, has a strong presence among foreign lenders in China.

However, it is understood that it has reservations about a sale by Temasek because it could compromise independence.

Income from Standard Chartered’s Chinese business more than doubled in the first half of 2007 and the bank has plans to expand its network from 30 branches (spread over 15 cities), to 40 by the end of the year.

Standard Chartered, which is valued at around £25 billion, derives over 90% of profits from Asia, Africa and the Middle East.

It is currently experiencing strong growth in its Islamic finance business, Saadiq.

In the first-half of 2007 pre-tax profits increased around 30%, to $1.98 billion, on the same period of 2006.