HSBC bid for Nedbank stake fails

London/Johannesburg: HSBC has ended talks to buy an $8 billion (Dh29.3 billion) majority stake in South Africa's Nedbank, leaving a hole in its African strategy and handing an opportunity to rival Standard Chartered.

HSBC had been in exclusive talks with Anglo-South African insurer Old Mutual to buy up to 70 per cent of Nedbank, South Africa's fourth-largest bank, and an eight-week period of exclusivity was due to end on Monday.

The end of talks leaves HSBC, Europe's biggest bank, without a convincing Africa strategy and could hand rival Standard Chartered a chance to buy Nedbank, analysts said.

Standard Chartered has held talks to buy the stake before, sources have said.

The bank said after unveiling a $5.3 billion rights issue on Wednesday that the funds were not for big acquisitions but rather for organic growth and to meet tough capital requirements.

Neither HSBC nor Old Mutual said why the talks broke down, though the insurer said that, as far as it was aware, it was not due to adverse findings during due diligence.

At 0950 GMT shares in Nedbank in Johannesburg were down 8.9 per cent and Old Mutual down 5.7 per cent in London. Shares in HSBC were up 0.4 per cent and StanChart's dipped 0.2 per cent.

Nedbank's troubled retail unit could contain credit risks that might be a concern for HSBC, analysts said.

HSBC has a limited presence in Africa and had seen the deal as a launch pad to expand there, especially as trade between Africa and China increases. But since talks began, the bank has announced a change in chairman and chief executive after a boardroom power struggle.