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South Africa: Nedbank eludes HSBC

Dropping of Nedbank deal still unexplained; Door now open for Standard Chartered

Nedbank’s chief executive, Mike Brown

Nedbank’s Mike Brown: said to have found out from the press that HSBC had withdrawn

It was the event of the year in South African banking. The announcement of HSBC’s $7.3 billion bid for Nedbank in July was greeted with much excitement and clamour. Local bankers talked enthusiastically about a new player in Africa, the diversification of HSBC, a boost for South African banking, the globalization of the South African economy, and so on.

But no sooner had the excitement subsided than 160 HSBC auditors and accountants doing the due diligence into Nedbank were on their way out of Johannesburg, without any such fanfare nor any explanation on their work, their concerns or their findings.

On October 15 HSBC issued a terse four-line, two-sentence press release saying that talks on acquiring the bank had not been successful and had ended. Neither HSBC nor Old Mutual (the majority shareholder in Nedbank) nor Nedbank itself has since offered a detailed statement explaining the withdrawal. Nedbank’s chief executive, Mike Brown, and South African regulator Errol Kruger are understood to have found out about the withdrawal from the newspapers.

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