The race by foreign banks for a chunk of the South African banking pie appears to be hotting up.
The bid by United Kingdom banking group Barclays plc for Absa seems to be gaining momentum, with speculation that a deal could be imminent following Absa’s confirmation that an update to shareholders would be forthcoming on Thursday.
Emerging-market banking group Standard Chartered has reiterated its intention to garner a bigger slice of the South African market — with acquisitions not being ruled out.
Absa has to renew its cautionary on Thursday as it has been six weeks since the last one, and the bank intimated on Wednesday that considerable progress has been made in its talks with Barclays since then.
Meanwhile, the Johannesburg daily Business Day, in a report from Kuala Lumpur, on Wednesday quoted Standard Chartered CEO Mervyn Davies as saying there is a possibility of the bank making an acquisition in South Africa — or of just growing 20Twenty, the online bank it bought last year from Saambou.
Davies told the newspaper it will be tough to grow organically in South Africa due to “four very competent players”, but said the group will still be able to break into the market without having to buy a bank.
“We can and will be in the consumer retail space as well as wholesale,” the report quoted him as saying.
Since establishing a presence in South Africa about a year ago, Standard Chartered has made no bones about the fact that it plans to become a big player in the country and has maintained that it is constantly on the lookout for acquisitions.
In fact, Absa insiders have disclosed that the bank expressed an interest in Absa before Barclays did. But after the Barclays bid was announced, Standard Chartered said it would not be counter-bidding for Absa.
Foreign control of any South African banks, however, would be contingent on whether the government is willing to change its present policy — or so-called “four pillar” approach — of having four strong, South African-owned banks.
But Minister of Finance Trevor Manuel has said the government will re-examine its policy and media reports maintain that President Thabo Mbeki has already given the Barclays deal his blessing. — I-Net Bridge