Johannesburg - Standard Bank Group [JSE:SBK] has been disappointed by the revenue so far from its tie-up with Industrial and Commercial Bank of China, the head of Africa's largest lender told Reuters on Wednesday.
Jacko Maree, Standard Bank's group chief executive, also said in an interview at the Reuters bureau in Johannesburg that the bank was in "hiring mode" for skilled bankers, and aimed to double its Nigerian branch network this year.
Standard Bank, which is 20% owned by ICBC, is targeting the increasing trade flows between Asia and the resource-rich continent.
It currently has about 40 bankers working in China with ICBC, but has struggled to generate revenue from the fast-growing Asian country, he said.
"We definitely would have thought by now we would have converted more of those deals into revenue," Maree said.
"So we are disappointed."
Revenue from the tie-up with ICBC totalled around $38m in the six months to end-June, down from about $47m a year earlier, he said.
Standard Bank faces stiffer competition from overseas players, who are also targeting deals between Asia and Africa. Britain's Standard Chartered has a long history of finance deals between the two regions, while Absa Group [JSE:ASA] is majority owned by Barclays.
HSBC threat
Standard Bank could face a threat from HSBC, Europe's biggest bank, which is in exclusive talks to buy South African lender Nedbank Group [JSE:NED].
"When someone like that comes onto your patch, you better sit up and take notice," he said, citing HSBC's global network and strength in corporate and retail banking.
"It is hard to see how (HSBC's acquisition) would be good for us."
In recent weeks Standard Bank has hired two high-profile bankers from other lenders to help bulk up its transaction and retail banking across the continent.
Maree said the bank was still in "hiring mode" for skilled bankers, including areas such as project finance, transaction banking and mergers and acquisitions.
It is also looking to double the number of its branches in Nigeria, Africa's most populous nation, to around 100 by the end of the year, he said.
The Johannesburg-based bank is still interested in a Nigerian acquisition, but said those of the country's banks that were rescued by the government were becoming less attractive, while those that had not been bailed out were now expensive.
Nigeria is in the process of setting up an asset management company to buy bad loans from banks in exchange for government bonds, to restore credit flows in the economy, and make the nine lenders rescued last year more attractive to potential investors.
Maree said the rescued banks had been losing business after taking government support, but their costs had not come down.
"If we could, we would love to increase the size of our business there in a swift move," he said
"The problem at the moment is that the good banks have been very expensive and bounced back in a big way, and the banks that have been in trouble have now been in a trouble for a long time."