HSBC is in talks to buy up to 70 percent of South Africa’s Nedbank, in a potential US$6.8 billion deal that would give Europe’s biggest lender a broader gateway to the fast-growing African continent.
HSBC and Anglo-South African insurer Old Mutual, which owns a controlling stake in Nedbank, said in separate statements yesterday they were in exclusive talks about the deal.
Old Mutual said HSBC could purchase up to 70 percent of South Africa’s fourth-largest bank, an acquisition that could be worth about 49.9 billion rand (US$6.8 billion), given Nedbank’s current market value.
It was not immediately clear whether HSBC would get the necessary clearance from South Africa’s regulators to buy a stake in the bank. HSBC already has a presence in South Africa, offering commercial banking and offshore personal banking.
For HSBC, which has lagged behind rival Standard Chartered in Africa, the acquisition would bulk up its presence as more of its Chinese customers are looking to do deals on the resource-rich continent.
HSBC also faces a growing threat from South Africa’s Standard Bank, which is 20 percent owned by the Industrial and Commercial Bank of China (中國工商銀行) and is positioning itself as a gateway to Africa.
“This is the right thing for HSBC to do if it wants to focus on emerging markets,” said Dominic Chan (陳志銘), an analyst at BNP Paribas in Hong Kong.
“Trade between Africa and China has been growing very rapidly and HSBC doesn’t have the same presence there as Standard Chartered, which makes this buy especially crucial if it wants to continue expanding there,” he said.
South Africa’s head of bank regulation, Errol Kruger, said it was too early to comment on the deal.
“They still have to submit all the applications they need to go through and then we’ll need to apply our minds to it,” he said in a telephone interview.
Shares of Nedbank and Old Mutual surged on the news, while HSBC edged higher. The South African rand rose slightly in early trade, helped by the news of the potential deal.
Old Mutual chief executive Julian Roberts said the group aimed to unload its entire 52 percent-stake in Nedbank but the exact amount it sells hinged on minority shareholders.
Nedbank would remain listed in South Africa and Roberts said Old Mutual would not have gone into exclusive talks without hope of regulatory approval.
“If we’re left with a rump stake, that would be fine and we would manage that into the future,” he said.
Media reports had previously said that Standard Chartered might bid for Nedbank. Roberts said Old Mutual had been in talks with other parties, but declined to elaborate further. He also declined to give information on the potential value of the deal.
A Standard Chartered spokesman in London declined to comment, but a source close to Standard Chartered said it had considered the Nedbank stake but was concerned about overpaying.
Nedbank currently trades at about 1.3 times its forward 12-month book value, versus 1.6 times for bigger rival Standard Bank and 1.3 for HSBC, according to Thomson Reuters StarMine.
BNP Paribas’ Chan said he estimated 1.8 to 1.9 times the book value as a reasonable price for the deal.
The sale would help Old Mutual in its strategic overhaul to slim down its complicated structure and pay down debt.
Nedbank, which said in a statement that HSBC was an attractive international banking partner, has been struggling with a money-losing retail unit.
The bank this month posted flat first-half earnings and said it would struggle to meet its medium-term forecasts.
Shares of Nedbank surged 6.7 percent to 139.90 rand in Johannesburg, while Old Mutual gained 4.1 percent in London.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from