Old Mutual, owner of 51.5% of Nedbank, is in talks with HSBC over the sale of its majority stake in the South African bank.
According to a statement from Old Mutual, HSBC is looking to purchase up to 70% of its shareholding in Nedbank: 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.
The move, although unconfirmed from HSBC, would match its desires to expand in the emerging markets. In the first six months of 2010, Hong Kong and the Asia-Pacific region accounted for 53% of the banks profits. Only the North American market saw a loss for HSBC.
Earlier in 2010, CEO Michael Geoghegan coined the phrase CIVETS to refer to the next emerging markets targeted for growth: Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.
HSBC will also offer competition to Barclays and Standard Chartered in the region. In 2005 Barclays bought a majority stake in Absa Group, the largest consumer bank in South Africa. Standard Chartered, the largest lender in Africa, recently bought the African custody business from Barclays Bank. Standard Chartered also purchased First Africa (an African M&A advisory business) in 2009 and opened a new representative office in Angola, its fourteenth African market, in early 2010.