The Absa Group, one of Africa’s largest diversified financial services companies, aims to build stronger ties with Chinese companies as part of its global expansion strategy, in a context of growing investment and trade between China and Africa.
The Johannesburg, South Africa-based bank will focus on strengthening relationships with state-owned entities, private companies, banks and development finance organizations through its subsidiary, officially launched in Beijing in early May, according to with Klaus-Dieter Kaempfer, CEO of Absa. China.
“Absa’s strategy in China is to use our office to better connect with the headquarters of Chinese companies doing business in Africa,” he said.
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With a solid customer base already established, Absa will make its presence known and develop much closer relationships with potential customers on the continent, he added.
Visitors pass by the China-Africa Achievements Exhibition during the third China-Africa Economic and Trade Expo in Changsha, central China’s Hunan province, in June last year. Photo: Xinhua alt=Visitors pass by the China-Africa Achievements Exhibition during the third China-Africa Economic and Trade Expo in Changsha, central China’s Hunan province, in June last year. Photo: Xinhua>
Absa’s Beijing office operates under a wholly foreign business license, which allows it to provide general advisory and research services to China-based clients for transactions across Africa.
“To be clear, we are not doing business in China and we are not doing domestic business,” Kaempfer said. “What we’re doing is developing relationships, advising on the capabilities that Absa Group has across its footprint in Africa, and our business is actually run there.”
The plan to open an office in China was revealed by Zhu Kai, director and head of Absa Corporate and Investment Bank’s China Corridor, in May last year. The opening of the office was initially scheduled for the end of 2023, but the license was only obtained in December, when a team was hired, delaying the launch until last month.
China’s total trade with Africa rose 1.5 percent year on year in 2023 to $282.1 billion, while the trade deficit of the continent with the world’s second-largest economy widened 36.4 percent to 65 billion dollars, according to Chinese customs data published in February.
China’s total investments in Africa reached nearly $11 billion in 2023, the highest figure since at least 2005, according to data from the Washington-based think tank American Enterprise Institute.
“I think what makes Absa an attractive banking and financial services partner is the quality and depth of our network – our main operations are in Africa and we have been there for over 100 years,” said Kaempfer.
The bank has a strong presence in various sectors, he added.
“We are the leading provider of renewable energy finance across the continent and have very capable teams in mining, minerals, commercial finance and debt.”
This article originally appeared in the South China Morning Post (SCMP), the most trusted voice on China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit SCMP Facebook and Twitter Pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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