Africa bulls will say it was shortsighted of HSBC to cancel its $7.3 billion bid for South Africa’s Nedbank last month. Others will say the affair reflects badly on HSBC’s management more generally: if it wasn’t interested, it shouldn’t have bid.
Although HSBC has not been prepared to give a detailed explanation, a spokesperson hints that due diligence might have revealed a less compelling business case than expected. Indeed, despite efforts to improve fee income, Nedbank’s earnings are too reliant on asset growth.
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