Absa Group yesterday launched a non-banking subsidiary in China, fortifying the growing economic bridge between Africa and China.
The China-Africa investment relationship has flourished over the past few decades – China is now the continent’s largest bilateral trade partner. This has been fuelled by Chinese investment in Africa’s natural resources and infrastructure projects, creating commercial opportunities for both regions.
Other South African banks have also forayed into China to benefit from the opportunities of increased trade, with, for instance, Standard Bank last year renewing its 15-year-long co-operation partnership with the Industrial and Commercial Bank of China for another five years – the partners claim to lead the Africa-China trade and investment markets. FirstRand Bank also has a representative office in Shanghai.
“Through this expansion, Absa isn’t merely acquiring a new location; we’re affirming our dedication to expanding our global presence and playing our part in facilitating growth on the continent,” Absa CEO Arrie Rautenbach said.
Absa owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda and Zambia and has insurance operations in Botswana, Kenya, Mozambique, South Africa and Zambia.
Absa also has offices in Namibia, Nigeria and the US, and securities entities in the UK and US, with technology support in the Czech Republic.
Rautenbach said their decision to establish a presence in China was driven by an ambition to better connect trade, investment flows and clients into Africa – the bank would serve them across its continental footprint.
“Absa intimately understands the continent and seeks to be a partner of choice for organisations looking to access opportunities on the continent,” Rautenbach said.
He said Africa was endowed with talent, mineral wealth and a young population, and was poised to play an influential role in global trade, as investors began to recognise its status as the last true frontier in global growth.
The office in China will operate under a wholly foreign-owned enterprise licence. The office allows Absa to provide general advisory services to clients in China for concluding transactions across Africa, as well as distribute economic or general securities research reports permitted by Chinese regulation to corporate and institutional clients in China, and across the African markets.
“This is part of a wider commitment from Absa to expand its operations with an international presence in strategic markets and offer deep expertise in African markets to its overseas clients,” Absa Corporate & Investment Bank CEO Charles Russon said in a statement.
“This will not only give us a physical presence in the region but also help us to meet the needs of our clients operating in this rapidly growing market,” he said.
“Being present in China allows us to be close to clients who see trade and investment in Africa as key to their strategic ambitions,” he added.
Absa’s share price was unchanged at R147.55 on the JSE yesterday afternoon.
BUSINESS REPORT