African business, politics and lifestyle
Banking on Africa
Mining companies are looking more cautiously at South Africa after a brouhaha over shady deals. Media and diplomats are nervous of measures they fear could curtail press freedom. South Africans in general are wondering how much damage an ongoing public sector strike will do and whether it is a sign of worse labour unrest to come.
But global banking giant HSBC certainly seems to be taking a positive long term view of Africa’s biggest economy with its talks to buy up to 70 percent of South Africa’s Nedbank in a deal that could be worth more than $8 billion.
HSBC wouldn’t only be getting a strong presence in South Africa, though.
It would be getting a solid foothold on a continent set to be among the world’s fastest growing in the years to come and where it is coming from behind against well-established emerging market rivals Standard Chartered and South Africa’s own Standard Bank.
Particularly important for HSBC would be helping its Asian customers do business in Africa. Although Nedbank does not by itself have the presence across Africa that some of its rivals do, it has an alliance with West Africa-based lender Ecobank spanning the continent.
It’s hard to tell to what extent a bid for Nedbank is a bet on South Africa and how much on the rest of Africa – South Africa’s top businesses are finding it increasingly important to be strong in the rest of the continent in any case. What can be in no doubt is the intensity of the looming competition among local and global banks across Africa.