October 25, 2007 - Industrial and Commercial Bank of China Limited ("ICBC") and Standard Bank Group Limited ("Standard Bank") jointly made an announcement on equity deal and strategic cooperation.  As agreed, ICBC will be the single largest shareholder of Standard Bank after paying 36.67 billion rand (USD 5.46 billion) for a 20% stake. Both banks state to move forward in many areas through strategic cooperation.

Actual acquisition goes by: (1) Standard Bank issues targeted new shares to ICBC tantamount to 10% of enlarged share capital, at 104.58 rand each share; (2) ICBC buys from existing shareholders of Standard Bank a proportional amount of shares equal to 10% of enlarged share capital, at a price of  136 rand per share.  Both options are mutually prerequisites. ICBC will own 20% share capital of Standard Bank when the deal is concluded.  

South Africa is the largest and strongest economic entity in Africa. On a regional basis, Standard Bank has a long history, the largest commercial bank in South Africa or Africa as well. Standard Bank is heading in Africa in asset terms, reaching 1.0879 trillion rand (USD 162 billion) by the end of the first half of 2007. In terms of Tier 1 capital, Standard Bank is the winning bank in Africa and the 106th in the world. Today, Standard Bank boasts 1051 branches in 18 African countries and around key financial centers of Europe, America and Asia. Among various business areas that the bank covers include retail banking, corporate and investment banking, and life insurance. In 2006, Standard Bank pocketed a net profit of 12.51 billion rand (USD 1.86 billion), or 25.5% of return on share capital in average. Standard Bank's quality asset keeps its rate of non-performance loan under 1.5% for 3 years continuously. Standard Bank went public on the Johannesburg Stock Exchange back in 1970 and had a market capitalization well over 144.7 billion rand (USD 21.5 billion) on October 22, 2007.

ICBC is the largest mainland lender with total assets standing at USD 1.1 trillion. At the end of its 2006 financial year, ICBC ranked the seventh in the world's bank list by gross capital and as of now, the largest with its market capitalization in excess of USD 300 billion. ICBC has 16807 domestic branches and 98 overseas subsidiaries. ICBC and Standard Bank dovetail neatly as both own a huge network of branches and a strong base of quality customers. Both banks will chalk out a capital-centric tactical play in sharing customer and network resources and work closely in the areas of international settlement, trade financing, trades of funds, and investment portfolio.

"Strategic cooperation between ICBC and Standard Bank means two largest commercial banks, in China and in Africa, are partnering in tow", ICBC Chairman Mr. Jiang Jianqing said.  "We hope this is a bridge between China and South Africa, a bridge between Asia and Africa. Through our tactical alliance with Standard Bank, ICBC will step up its efforts in streaming its deployment of assets around the world to give our customers far superior cross-border financial services, to create even higher return to our shareholders. This Agreement is definitely of economic interest to both parties, as well as a catalyst to cement the economic and trade ties between China and Africa."

The transaction has yet to be adopted by the two banks' own shareholder meeting and South Africa's jury on agreement transfer and requires the approval of all regulatory bodies concerned: China Banking Regulatory Commission, South African Reserve Bank and South African Banking Registry.