Standard Bank, Africa’s biggest bank by assets, on Thursday said it had to writedown R854 million ($80 million) because of its closeness to an alleged metal bankrolling scam in China, the world’s second biggest economy.
In May this year, Chinese authorities started a probe into whether metals trading company, Decheng Mining and others had used bogus stockroom receipts at Qingdao port to take numerous financial advances obtained against a “single cargo of metal.”
Standard Bank said it was still uncertain if more writedowns would be possible going forward because there is insufficient information coming out of China.
“For us this is a very unfortunate event and something that we clearly weren’t bargaining on or went looking for,” CEO, Ben Kruger, told Reuters on Thursday.
Standard Bank got exposed to China because the Industrial and Commercial Bank of China (ICBC), the world’s biggest bank, is the major shareholder in the Johannesburg-based lender with 20 percent shareholding.
Kruger said Standard Bank would have posted a 12 percent surge in headline earnings a share during the six months to June this year had it not been for the writedown.
Headline earnings a share moved up 0.6 percent to 507.7 South African cents during the period under review.
Source: Ventures Africa