Standard Chartered and the Agricultural Bank of China have renewed a Memorandum of Understanding agreeing a partnership to provide renminbi 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, with both banks claiming that this will enable their clients to benefit from the advantages brought about from the internationalisation of the Chinese currency.
The availability of RMB clearing services in the UK could strengthen London’s position as a leading offshore RMB centre. It also could also potentially help lead to he 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.
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.
The logic behind the MOU is that ABC will provide the customer base and knowledge of their local market while Standard Chartered will provide experience in supporting corporates and financial institutions across an international network and offer clients the opportunity to add on complementary solutions for their growth targets.
Peter Sands, group CEO of Standard Chartered, says, “The strategic partnership with
ABC is 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,” he adds. “The opportunity to boost RMB liquidity in London could be used to fund large investment projects and support the development of other financial activities.”
Zhang Yun, president of ABC, adds, “ABC has the most extensive distribution network and abundant RMB funds and will inject sufficient RMB liquidity into the London market.
“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,” he adds.