Connecting Africa and China

Meet Nick Hamilton, the man charged with making the most out of the alliance between China's ICBC and South AfricaÆs Standard Bank.
The hard work is only just beginning for Nick Hamilton, Standard BankÆs group chief executive officer for the Asia-Pacific region.

The British banker says he feels like the proverbial striker facing ôan open goalö following Industrial and Commercial Bank of ChinaÆs (ICBC) $5.5 billion investment in Standard Bank. The deal was finalised in mid-February and he is now faced with a stadium full of fans watching his every move. Out of the high-stakes, adrenaline rush of the negotiation process comes the nitty-gritty, detailed slog of making the agreement work.

For those readers who may know little about Standard Bank, it has 145 years of history behind it and grew up as the Standard Bank of South Africa. Today, it ranks as the largest bank on the African continent and has operations in 38 countries worldwide, of which 18 are in Africa itself. Hamilton believes the bank is extremely well positioned to accelerate its international expansion plans, with management particularly keen on emerging markets; a strategy they share with their Chinese partners.

Hamilton doesnÆt take credit for the marriage. He says a strategic alliance between the two banks was first mooted at last yearÆs International Monetary Conference (IMC) hosted by Standard Bank chief executive Jacko Maree in Cape Town. A meeting between Maree and ICBC chairman Jiang Jianqing preceded 45 days of intense negotiations and an agreement, which led to ICBC taking a 20% stake in Standard Bank û billed as ChinaÆs largest direct investment into an Africa to date.

Closing the deals

But Hamilton is the man behind the deals that are now getting done. For example, he says ICBCÆs Chinese clients have already begun exploring opportunities on the African continent working in tandem with Standard Bank, which recently provided advice and financing for Chinese telecom companies operating in Ethiopia and Angola. China alone could account for up to $65 million in earnings for the bank and Hamilton sees myriad opportunities, from helping African clients operating on the mainland to gaining access to lucrative investment banking business, particularly in the non-performing loan (NPL) space. The latter plays to HamiltonÆs strengths and his long experience in the Asian region.

As Hamilton says: ôItÆs important that the person who is working on a deal in say, Indonesia, understands that someone might come to the table with a proposal that may involve cutting down a rainforest. You need to know the regions youÆre in, and the land youÆre talking about, so you can say, æNo we wonÆt do thatÆ or æthe way to do this and make it sustainable is this wayàÆö

Hamilton gained his regional spurs during the Asian financial crisis or, as he rather bearishly calls it, ôthe last crisisö. However, until 2000 he was based in New York and, before that, in London. Now his wife and two sons live in Singapore, while he straddles a regional remit that encompasses Sydney, Beijing, Hong Kong and Tokyo, not to mention Johannesburg.

He joined Standard Bank 18 months ago from HVB/UniCredit group where he was Asian chief executive. Hamilton says he was attracted by Standard BankÆs push into emerging markets and the opportunity to build on the kind of pioneering securitisation and NPL work heÆd been executing at HVB/UniCredit. He came with a team of his own people who had a number of firsts under their belts, including debut cross-border securitisation deals from Singapore and Taiwan.

By 2009, Hamilton would like Standard Bank to be writing up to $1 billion in US$/Rmb commodity-related syndicated loans and letters of credits from China. This adds up as commodities have always been Standard BankÆs strong suit û many of its Asian-based African clients hail from the power and mining sectors. As a result, Hamilton has spearheaded Standard BankÆs strong push in Tokyo û an idea that initially needed some selling to management back at head office. The scratching of heads was not really that surprising given that Standard Bank is positioning itself as an emerging markets bank and Japan has not been emerging for some decades.

But Hamilton explained to his bosses in Johannesburg that the current source of liquidity for the Asian commodities market lies in Japan on the Tokyo Commodities Exchange. However, that may change. ôOver time, China could challenge JapanÆs position,ö he says.

Aside from seeing growth in the commodities sector, Hamilton uses his bearish viewpoint of current economic conditions to forecast great opportunities in the NPL space. He is also seeking to grow the bankÆs principal finance business.

In this respect, he points to a recent deal he helped handle: Standard BankÆs purchase of the Mustang Group, AustraliaÆs second-largest luxury boat builder, which had gone into receivership in October 2007.

Selling the story

These are the diverse types of sales pitches that Hamilton makes nowadays and one of the chief reasons why he loves being in Asia. He describes it as seeing the pair-ups, which at first blush may not seem that intuitive, but which really could work. For a man with a Scottish father and a Swiss mother, unexpected match-ups are in his blood.

In his spare time, Hamilton has a passion for rugby, which must have put him in the centre of some quick-spirited discussions with his colleagues, not to mention his South African wife. He has lived and worked in South Africa and knows the lay of the land well. And itÆs clear that working for a South African bank really agrees with this truly global banker.

ôThe Chinese say you have to be friends to be good business partners,ö he concludes. ôAfter several trips to South Africa and many to China, weÆve decided on Chinese cuisine and South African wine as the basis of our partnership. And while this means my waistline is now struggling, the synergies weÆre finding have already exceeded all our expectations.ö

This profile was initially published in the February issue of FinanceAsia magazine.
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