Absa Group’s Corporate and Investment Banking unit plans to open an office in China as part of an expansion that will also target other parts of Asia and the Middle East, reported Bloomberg.
Charles Russon, Absa Investment Banking’s CEO Division’s chief executive officer, said, “Next year, we will be seeking strategic approval from our board for an on-the-ground presence in China.”
South Africa’s third-largest bank has seen business involving the world’s second-biggest economy and its operations across 13 markets on the continent more than double this year, albeit from a small base, said Russon.
“As you establish some of those relationships in mainland China you have actually got to have people on the ground who can execute on it and service the client locally. Middle East and Asia are probably further behind,” added Russon.
Absa is not the only local lender chasing China. Larger rival Standard Bank Group, which is 20 per cent owned by Industrial & Commercial Bank of China, has said it plans to draw more of the $147 billion a year of bilateral trade between Africa and China.
Similarly, FirstRand.’s Rand Merchant Bank has a representative office in Shanghai and has entered partnerships with several Chinese lenders, while Nedbank Group in 2013 agreed to cooperate with Bank of China.
Russon said that the lender, which has a transactional banking relationship with Huawei in Africa, has already opened a representative office in London and is waiting for final regulatory approval to open in New York to better capture flows in and out of the continent.
The CIB division, which accounts for about a third of Absa’s profit, will make one or two new hires in its mergers and acquisitions team, Russon said, without giving details. Absa will also continue expanding its products, which currently includes structured trade finance and commercial property finance, according to the lender’s first-half results booklet published in August.