China Development Bank (CDB) and Barclays yesterday locked in a five-year strategic alliance on commodities, as part of a partnership deal signed in July.
Yesterday's announcement by the banks sends a clear message that their partnership will not be affected by Barclays' withdrawal from a takeover bid for ABN Amro last week.
The new alliance will initially focus on the areas of energy, metals and emissions.
"The strategic alliance will combine CDB's strong relationships and market presence in China with Barclays' global commodity capability, risk management and banking expertise," CDB and Barclays said yesterday.
Under the deal, Barclays will work closely with CDB to develop commodity products origination and trading capabilities within CDB, and to enhance the Chinese bank's commodities execution and risk management infrastructure.
In exchange, CDB will appoint Barclays as its preferred provider of commodity market risk hedging.
The alliance is seen as part of the two banks' strategic partnership fixed in July when CDB paid 2.2 billion euros for a 3.1 percent stake of Barclays to become one of Barclays' largest shareholders.
"Barclays is publicly recognized as one of the top three global commodity banks. CDB is confident that Barclays is the right partner to ensure the long-term, successful development of CDB's commodities business capabilities, as we evolve into a commercially operated financial institution," Gao Jian, vice-governor of CDB, said yesterday.
"Barclays has enjoyed a strong, long-standing relationship with CDB, and we are delighted with this further opportunity to work together," said Robert Morrice, chairman and CEO of Barclays Asia.
"With CDB's strong market position in China and Barclays' extensive commodities capabilities, I have no doubt that this arrangement will provide substantial long-term benefits for both parties," he said.
The initial term of the alliance is five years, with an option to extend for a further period if both parties agree.
(China Daily October 11, 2007)
