FirstRand and CCB announce strategic alliance

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South Africa's biggest financial services group yesterday announced a “strategic co-operation” agreement with China's second-largest bank, a move that underlines the growing interest of the country's corporate sector in Asia, Africa and other emerging markets.

FirstRand, which last month announced a new business focus on Asian markets, believes that the agreement with China Construction Bank will allow it to compete more effectively for business in Africa.

“It will allow FirstRand and CCB to participate in the large transactions and investment opportunities we expect to emerge in the continent,” said Sizwe Nxasana, the incoming chief executive who last month became the first black South African to head one of the country's top four banks.

被过滤广告First Rand recently won a banking licence in India and the bank's South African rivals are also eyeing similar opportunities.

In the biggest development to date just under two years ago, China's largest bank, the Industrial and Commercial Bank of China, paid $5.5bn for a 20 per cent stake in Standard Bank.

More generally, South African businesses have begun to focus more keenly on opportunities in emerging markets.

Africa in particular is seen as a high-growth market and is one of the factors that persuaded MTN, South Africa's second-largest telecoms group, and Bharti Airtel of India to examine a possible merger.

Talks between the telecoms groups over a possible $23bn deal have been proceeding for more than two months with a self-imposed deadline for an agreement scheduled to expire today – although the parties are expected to announce that the discussions will continue.

Complications about where any merged group would be based and listed are understood to be the biggest obstacle.

Chinese interest in African construction projects provides the key to yesterday's agreement between FirstRand and CCB.

Chinese construction companies are active across the region and are particularly prominent in markets such as Angola and Zimbabwe, where FirstRand would particularly like to grow.

CCB's big balance sheet makes it an ideal partner.

Chen Zuofu, vice- president of CCB, said the bank considered Africa to be a significant growth market.

According to the terms of a memorandum of understanding signed yesterday, the banks will combine to provide advisory services to CCB clients seeking to invest in Africa, to South African or African-based clients that may be of interest to CCB's Chinese customers, and to FirstRand customers looking at Chinese opportunities.