The government supports the principle of there being a minimum of four large banks supervised by the South African Reserve Bank, Minister of Finance Trevor Manuel said on Thursday.
This “four-pillar approach” works in Australia too, he said.
“The four-pillar approach … is the policy as it stands now. The facts haven’t changed yet. We have not been approached directly on these issues. Until the facts change, the policy stands,” Manuel told students at the University of the Witwatersrand.
Manuel’s remarks followed Absa announcing that Sanlam’s share in the bank may be sold.
Absa issued a cautionary notice on Thursday, which read: “Shareholders are advised that discussions are taking place which may or may not result in a controlling stake in Absa being acquired.”
Sanlam has a 21% stake in Absa, making it the largest single shareholder.
On Thursday afternoon, Absa confirmed it is in talks with British bank Barclays plc, which could lead to the latter acquiring a controlling stake in Absa.
It said the acquisition, if it occurs, will be in the form of a partial offer to shareholders for a majority stake in Absa.
“The process is at an early stage and shareholders are advised to continue exercising caution when dealing in Absa securities until a further announcement is made,” the South African group said.
Finance union Sasbo has welcomed the possibility of a foreign bank buying Sanlam’s stake in Absa.
“The 60 000-strong banking union believes it would be beneficial for South Africa and development in the South African Development Community,” said Sasbo deputy general secretary Ben Venter said on Thursday.
Sasbo represents banking officials and other employees in the finance sector.
Venter said: “Generally, United Kingdom-based banks tend to have a social conscience and we are positive that they will contribute towards social development in South Africa.”
Venter said the deal could see a large capital injection into the South African economy, and would strengthen Absa in Africa.
“We do not foresee a negative impact on jobs. We believe the potential exists for job creation and would prefer this type of transaction to a merger amongst local banks,” he said.
“Sasbo, a Congress of South African Trade Unions affiliate, will, in need, play a key role in presenting a case to the relevant authorities in South Africa, and will do so as result of its belief that a UK bank would be a good cultural fit which will contribute meaningfully towards the social challenges in South Africa,” Venter said.
Sanlam earlier said it will consider any offer that will benefit its shareholders.
“The Sanlam board will consider any offer for its investment in Absa on the potential to deliver appropriate value for Sanlam.”
Sanlam spokesperson Frans van Rensburg was not immediately available to expand on Sanlam’s statement.
Officials from Barclays and Standard Chartered visited South Africa last month. Last year, Standard Chartered bought online bank 20twenty. — Sapa
Absa stake may be for sale