OREANDA-NEWS. December 31, 2013. Agricultural Bank of China Limited (ABC) and Standard Chartered Bank (StanChart) signed the Memorandum of Understanding on Strategic Cooperation (MOU) in Beijing. According to the MOU, both parties shall jointly launch RMB clearing business in the UK.

Financial institutions and enterprises shall be able to handle RMB transactions in London through ABC and StanChart and fully enjoy the convenience brought by RMB internationalization. Moreover, both parties will continue to deepen the cooperation in terms of the SME business and the support to overseas expansion of Chinese enterprises.

London is the world’s biggest FOREX trading center, and, by introducing RMB clearing business, its position as a RMB offshore center will be strengthened. In the meantime, the awareness and transaction efficiency of RMB business in London shall be improved, paving the way for the development of trade finance, global cash management, asset management and RMB bond settlement. The cooperation has highlighted ABC’s advantages in RMB liquidity and onshore business, as well as StanChart’s expertise in international settlement and experience in serving UK customers.

The MOU is the renewal of the framework cooperation agreement signed by and between ABC and StanChart three years ago. Relying on their own network and customer advantage, cooperation between ABC and StanChart in the past three years has obtained lots of achievements. For example, both parties obtained rapid growth of trade finance volume at home and abroad, supported the domestic and overseas business development of each other, and offered financial services jointly to Chinese enterprises “going global”. In China, ABC has an extensive operational network, enriched customer resources and deep knowledge of the market, while StanChart has successful experience in supporting enterprises and institutional customers to expand global business.

With complementary advantages, they will provide better financial support and services for the development of customers through cooperation.

Mr. Zhang Yun, President of ABC, said: “ABC has the most extensive branch network in China and abundant RMB funds. The cross-border RMB clearing business cooperation of ABC and StanChart will further integrate the funds and network advantages of both parties, and offer adequate RMB liquidity support and efficient RMB clearing services to London market. Besides, it will also deliver comprehensive market transactions and investment & financing services to players in London market, and provide all-round cross-border financial support for Chinese enterprises to “go global”. Renewal of the MOU is another important act of both parties to jointly build London offshore RMB center and promote the cross-border use of RMB on the basis of early cooperation. I hope that the tripartite benefit of ABC, StanChart and customers can be realized by tapping the cooperation potential deeply.”

Mr. Peter Sands, Group Chief Executive of Standard Chartered, said: “The strategic partnership with ABC is not only a win-win for both parties, but also 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.”

“We are proud to contribute to the strengthening of economic ties between the two nations, as the RMB continues to internationalize. London’s position as a leading international financial center 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; the opportunity to boost RMB liquidity in London could be used to fund large investment projects and support the development of other financial activities”, Peter Sands added.