Standard Chartered Bank and Agricultural Bank of China Collaborate to Provide RMB Clearing Services in the UK

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BeijingChina – – Standard Chartered Bank (“Standard Chartered”) and Agricultural Bank of China Limited (“ABC”) signed a Memorandum of Understanding (MOU) today that cements a partnership to provide Renminbi (RMB) clearing services in the UK.

Through this agreement, financial institutions and corporates will be able to work with Standard Chartered UK and ABC UK to execute RMB transactions, and benefit from the advantages brought about from the internationalisation of the RMB.  

Building on its position as the world’s largest FX centre, the availability of RMB clearing services in the UK will strengthen London’s position as a leading offshore RMB centre.  It also paves the way for greater awareness and the development of more RMB related products and services in areas such as trade finance, global cash management, asset management, and bond settlement through improved efficiency in the London time zone.

Today’s agreement is a testament to ABC’s strong onshore presence and RMB liquidity in China, and Standard Chartered’s international clearing expertise, leading position in offshore RMB and its on-the-ground capability in supporting clients in the UK.  The renewal of the MOU signed between Standard Chartered and ABC three years ago will see both institutions continue to expand in areas of partnership which include SME financing and continued collaboration to support Chinese corporates venturing overseas.

ABC’s extensive network, customer base and knowledge of the local market, coupled with Standard Chartered’s experience and expertise in supporting corporates and financial institutions across its international network offer clients the opportunity to tap on complementary solutions to best meet their growth needs.

Peter Sands, Group CEO of Standard Chartered, said, “The strategic partnership with ABC is not only a win-win for both parties, but also an opportunity for us to collaborate and offer our respective clients with opportunities to leverage relevant expertise for growth. Today’s MOU renewal offers both banks with unique opportunities to strengthen our value proposition and grow from strength to strength.

“London’s position as a leading international financial centre is enhanced by the ability to offer onshore clearing services that allow ‘on-demand’ access to settle RMB denominated services within the London time zone; the opportunity to boost RMB liquidity in London could be used to fund large investment projects and support the development of other financial activities.

“We are proud to contribute to the strengthening of economic ties between the two nations, as the RMB continues to internationalise.”

“ABC has the most extensive distribution network and abundant RMB funds and will inject sufficient RMB liquidity into the London market”, said Mr. Zhang Yun, President of the bank. “By integrating their respective strengths in network and funding, together, ABC and Standard Chartered will act as local RMB clearers, provide comprehensive trade, investment and financing services to market players in London, and support Chinese companies operating in UK with a package of cross-border financial solutions. The signing of this extended strategic cooperation agreement is another major move to foster a stronger partnership in which we will jointly build the London offshore RMB center and promote the cross-border use of RMB. Our aim is to further explore cooperation possibilities and achieve a win-win situation for ABC, Standard Chartered and our clients.” 

In July 2010, Standard Chartered became the largest banking cornerstone investor in ABC’s H-Share IPO and subscribed to USD 500 million worth of H-shares, demonstrating its continued commitment to China. During their 3-year partnership, the two banks have significantly increased their mutual trade volumes both domestically and internationally and supported each other’s expansion plans in China and abroad. Both of the banks are highly complementary to each other and have successfully collaborated together on a number of key Chinese companies going overseas by leveraging on Standard Chartered’s international network and expertise and ABC’s strength of client relationship.

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