HSBC 'close to gaining controlling stake in Nedbank'

23 August 2010

HSBC is looking to expand its presence in South Africa by taking a controlling stake in Nedbank, the country's fourth-largest financial institution.

It is close to winning an auction for the stake, beating off competition from British rival Standard Chartered, reports the Financial Times.

HSBC has run a small business in South Africa for the past 15 years and wants to make the purchase in order to gain a foothold in the rapidly-expanding African market, which the bank believes can play a key role in increasing trade flows between China and Latin America.

The Nedbank stake will allow it access to other markets on the continent, as the South African bank has a partnership with Togo-based lender Ecobank, which has operations in 29 countries.

Earlier this month, the Financial Times reported that HSBC's US division is under investigation for possible violations of bank secrecy and anti-money laundering laws from the Department of Justice and the US Attorney's Office.

By Asim Shah

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