Agricultural Bank of China (AgBank) and Asia-focused British lender Standard Chartered Plc have deepened a strategic alliance under which the two banks plan to set up a joint venture, Reuters reported on Monday.
Earlier this year, Standard Chartered invested $500 million as a cornerstone investor in AgBank's initial public offering in Hong Kong. AgBank, China's third-largest lender by assets, had raised a combined $22.1 billion from its dual-listing in Shanghai and Hong Kong in the world's biggest ever IPO.
The planned joint venture will provide support to China's fast-growing small and medium businesses, AgBank said in a statement posted on its website.
Under the tie-up, AgBank will give priority to Standard Chartered as its partner for its trade and cash management businesses. The two banks will also kick off a collaboration for cross-border business.
A strategic alliance team had been set up to implement those plans, the Chinese lender said. No financial details of the planned joint venture were given.
Standard Chartered and AgBank "could complement each other as they are focusing on different market segments and businesses," said AgBank's Executive Vice President Pan Gongsheng.
Standard Chartered could take advantage of AgBank's extensive domestic network, in return providing its partner with access to its international footprint, analysts said.
Founded in 1951, AgBank has over 23,000 branches and about 2.6 million corporate customers and 320 million retail customers.
London-based Standard Chartered currently has 59 branches in the Chinese mainland. The bank wants to open branches in as many as three Chinese cities per year subject to regulatory approval, Lim Cheng Teck, chief executive of Standard Chartered China told Reuters in September.