HSBC closes in on Nedbank

HSBC has entered into exclusive discussions to buy a 53% stake in South Africa’s Nedbank from its parent company Old Mutual.

This comes as part of HSBC’s drive to acquire up to a 70% majority stake in South Africa’s fourth-largest bank.

Old Mutual was hit heavily by the global financial crisis, and is selling off its non-core assets to deal with debt.

The transaction is subject to a number of potential obstacles, however, including gaining approval from regulatory bodies and winning over minority shareholders, as an HSBC spokesperson explained to GTR: “You cannot just buy a stake without triggering a response.”
From its perspective, Nedbank feels that the potential acquisition could provide the necessary platform for further expansion into South Africa and to wider markets on the African continent.

“Nedbank Group's initial assessment of the proposed transaction is that HSBC represents an attractive international banking partner and shareholder of reference and has the potential to provide Nedbank Group with benefits which should enhance Nedbank Group's ability to strengthen its position in the South African banking sector. Nedbank Group believes that there is a substantial opportunity for it to expand both within the South African and African markets in due course,” the bank comments in a statement.

However, the bank also stressed that the exclusivity of the deal talks is not an indicator to the certainty of a successful transaction.

If the acquisition is successful, HSBC will have beaten off competition for Nedbank from other international banks including Standard Chartered.