China's biggest lender is expanding its global reach by purchasing 80 percent of a bank in Argentina.
State-owned Industrial & Commercial Bank of China said Friday it will pay $600 million for the stake in South Africa-based Standard Bank Group's Argentina unit. The deal includes buying out ownership stakes of two families and requires regulatory approval.
China's state-owned banks, flush with cash from its economic boom, are expanding abroad to serve Chinese customers' rising global activities and take advantage of growing trade.
ICBC bought a 20 percent stake in Standard Bank for $4.75 billion in 2008 and the two institutions have collaborated on a series of ventures, including a $1 billion fund to invest in mineral and other resource projects.
Argentina is "one of the key focus markets for the bank's phased expansion in South America," ICBC's board of directors said in a statement.
The acquisition will strengthen ICBC's presence in Latin America and "contribute to the fast-growing bilateral trade relations between China and Argentina," it said.
ICBC said it will buy out ownership stakes of the local Werthein and Sielecki families in the bank. Standard Bank will retain a 20 percent stake.
The Chinese lender also will buy stakes in an investment fund and a commercial service provider linked to the bank.
Standard Bank Argentina, established in 1917, has 103 branches in Argentina.
ICBC is the world's biggest bank by market capitalization and said it had 14.4 trillion yuan ($2.2 trillion) in assets as of March 31.
Standard Bank: http://www.standardbank.co.za