Industrial and Commercial Bank of China Limited (ICBC 601398.SH ) has reached an agreement with South African financial institution Standard Bank to acquire an 80% stake in Standard Bank Argentina and its two affiliates (Standard Investments S.A. and Inversora Diagonal S.A.).

The deal has yet to acquire the regulatory green lights necessary for its completion, after which ICBC will take on responsibility for Standard Bank Argentina and its two affiliates.

Argentina is South America’s second largest economy, and although Sino-Argentine trade has been increasing in recent years no Chinese bank presently has a foothold in the country.

At present Standard Bank Argentina is 75% owned by Standard Bank London Holdings Plc (SBL), with the remainder held by shareholders the Werthein and Sielecki families.

As part of the agreement ICBC will pay US$600m to SBL and the families’ holding companies.

Chairman Jiang Jianqing described the move as win-win for all concerned, adding that it would enable to the bank to better serve the increasing bilateral trade between China and Argentina.

ICBC is actively seeking to expand beyond its domestic market, and earlier this year announced that its five branches in Europe had managed to achieve profits in the first half of 2011, having been established only at the start of the year.

by Richard Kilner