The move follows Standard Chartered's cornerstone investment of $500m in AgBank's record-breaking initial public offering in Hong Kong earlier this year.
The joint venture focuses on several key areas, according to a statement by AgBank. Under the tie-up, the two banks will collaborate to give support to China's fast-growing small and medium-sized businesses, and AgBank will give priority to Standard Chartered for its trade and cash management businesses. The two banks will also form a partnership for cross-border business.
"Our strategic co-operation with Agricultural Bank of China, one of the largest banks in China, will play an important role in growing our business globally," says Jaspal Bindra, Standard Chartered's chief executive officer for Asia. "We believe the complementary strengths of the two banks will not only foster our mutual business growth but also contribute to the further development of the global financial industry."
Pan Gongsheng, executive director and vice-president of AgBank, believes the two banks have "complementary strengths in different markets and businesses".
Emerging market-focused Standard Chartered currently has 59 branches in mainland China and the bank wants to open branches in as many as three Chinese cities a year, subject to regulatory approval. The joint venture will enable Standard Chartered to take advantage of AgBank's extensive domestic network while allowing the Chinese bank to develop its global ambitions.