Standard Bank has announced the details of the deal that it had alerted investors to yesterday. It revealed that the world’s largest bank by market capitalisation, the Industrial and Commercial Bank of China (ICBC) is to pay $5.6 billion for a 20 percent stake in the bank.

The announcement saw the shares of Standard Bank leap 6% to an all time high of 117.50 rand on the Johannesburg Stock Exchange.

Of the 36.7 billion rand to be paid by ICBC 20.7 billion ($3.1 bn) will be returned to the shareholders while the remaining 15.9 billion ($ 2.4bn) will be invested in the bank. The deal is the largest by a Chinese bank and comes on the back of the Chinese government encouraging overseas investment. This encouragement has already seen developments such as the American bank Bear Stearns and China’s Citic Security exchange $1 billion of equity between the firms.

In a statement ICBC’s Chairman Jiang Jianqing noted that the deal brings together China’s largest commercial bank and Africa's largest commercial bank. Standard bank has subsidiaries across Africa including IBTC Chartered plc in Nigeria, Stanbic Bank Ghana and Stanbic Bank Kenya.

The deal is further affirmation of China’s commercial interest in Africa which has risen significantly over the last decade. Observers expect to see more of the deals in the near future with South Africa’s Mobile phone giant MTN touted as another potential target for Chinese investment in Africa given its dominant position in the continent.