South Africans set up UK bank

AN IMPORTANT step in the re- emergence of South African banking groups in London was marked yesterday when Standard Bank inaugurated a new subsidiary in the City.

But the Bank of England has insisted that it is set up as a separately capitalised London bank rather than as a branch because of its South African parentage.

The new bank, with pounds 35m capital and 94 staff, is supervised by the Bank of England and is technically a British bank.

Standard is South Africa's second-largest bank. It was controlled by the British-owned Standard Chartered until 1987, when it reverted to South African ownership. At the time British banks were distancing themselves from the republic because of anti-apartheid pressures and a government- imposed standstill on repayments of South Africa's foreign debt.

But, along with Barclays' former South African subsidiary, First National Bank, Standard has decided that an easing of international pressures has paved the way for a move into London. First National is negotiating to buy the merchant bank Henry Ansbacher.

Dr Conrad Strauss, chairman of Standard, said: 'Since 1987 we have moved back into international markets. But we are not seeking a global presence. We will seek representation abroad only to further our interests in the South African trading base.'

The London bank is concentrating on foreign exchange and capital market activities and South African shares, rather than lending.

A key part of Standard's strategy is to expand into southern Africa as a whole. But Dr Strauss refused to confirm or deny reports that he is negotiating to buy the African interests of the Australian-owned Grindlays bank.

Standard was founded in 1862 and eventually became a major part of Standard Chartered Bank. Standard of South Africa said it did not believe there was a problem in reintroducing the Standard name to London alongside its former parent.

But in the Isle of Man and the Channel Islands it has agreed to call itself Standard Bank Investment Corporation to avoid confusion.

Dr Strauss said he was confident that violence in South Africa would be containable.

The argument was about the number of 'bumps and abrasions' along the way to the new constitution.