Standard Bank Extends Into Asia, Acquires Jardine Fleming's Hong Kong Operation

by Mary Swire, Tax-news.com, Hong Kong

07 May 2001

Standard Bank Investment, a leading banking group in South Africa, has announced plans to establish a substantial presence in Asia by purchasing Jardine Fleming (JF), the Hong Kong banking arm of JP Morgan Chase. Attracted by JF Bank's total assets of US$1.8 billion and a particularly strong position in the Hong Kong currency and money markets, as well as a sound base in banking and private client services, the acquisition is expected to be completed by the end of July.

According to Standard Bank the purchase price will not exceed US$120 million and is based on the adjusted net asset value of JF Bank at completion plus a premium. Although the acquisition will not have a material impact on Standard Bank's earnings or net asset value in the short term it is an important step in Standard Bank's strategy of exploiting growth opportunities in its chosen international markets, with China being identified as a particularly important country for its core products.

In a press release from Standard Bank, Malcolm Wilde, the Bank's Chief Executive in Asia, said: 'Standard Bank has been operating in Hong Kong for 10 years, but the addition of JF Bank's business will provide a substantially enhanced platform for Standard Bank's growth strategy in Asia. We will inject our existing Hong Kong operations into JF Bank and it is proposed that the bank will be renamed Standard Bank Asia Limited after an appropriate transitional period. The new bank will employ over 100 people in Hong Kong and will be an integral part of Standard Bank's international investment banking and private client business.'

Robert Herries, JF Bank's Chief Executive, claimed JF was 'delighted' that its long-term future was secure and said he was confident that 'JF Bank's proven strengths will complement Standard Bank's established position in resource banking, trade finance and debt capital markets to the mutual benefit of our clients and shareholders.'

According to the JP Morgan Chase group, the key reason for selling JF to the Standard Bank was to avoid duplication. Richard Mounce, Chief Operating Officer, Asia Pacific for JP Morgan explained: 'Many of [JF's banking] activities duplicate those already carried on by the JPMorgan group in Hong Kong. We took the decision therefore that the interests of JF Bank's clients and staff would be best be served by an acquisition of JF Bank by another established financial institution. We are indeed pleased that we have reached agreement with Standard Bank for such a sale and I am sure that the combination of the business of JF Bank with Standard Bank's existing operations in Hong Kong will allow Standard Bank to substantially grow its franchise here in Hong Kong.'

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