HSBC offer 'a vote of confidence', says Treasury

HSBC bank’s offer to buy a controlling stake in Nedbank was a vote of confidence in SA’s economic progress, the Treasury said on Monday.

“HSBC’s interest in Nedbank is a vote of confidence in the country’s political and economic progress over the past 16 years,” it said in a statement.

However it had not received any formal application on the proposed deal.

It was commenting after Nedbank’s majority shareholder, London-listed Old Mutual announced it had received a proposal from HSBC to acquire a controlling shareholding in Nedbank.

According to the country’s Banks Act, the acquisition of a shareholding of more than 15% requires the approval of the Registrar of Banks, and if the target shareholding exceeds 49%, requires the consent of Finance Minister Pravin Gordhan.

Gordhan would have to be satisfied the proposed acquisition would not run counter to public interest, the interests of depositors and the banking sector as a whole, or compromise the stability of the domestic financial system.

“However, it should be noted that Nedbank is already effectively owned by Old Mutual plc, a UK based company. No decision regarding regulatory approvals will be made until such time as the representatives of Old Mutual, HSBC and Nedbank, working through the South African Reserve Bank, have submitted formal requests for
regulatory approvals to the minister,” the department said.

Following a due diligence exercise, HSBC may approach Nedbank’s board to make a partial offer to all shareholders, including Old Mutual, to acquire control of the company.