South African banking group FirstRand put an end to speculation late on Friday, saying it is not in talks with United States-based Citigroup.
“In reaction to the ongoing media speculation, FirstRand wishes to inform shareholders that the group is not engaged in talks with US-based Citigroup. As consistently stated, FirstRand confirms that, from time to time, it has discussions with international banks.
“Discussions that warrant formal notification to shareholders will be dealt with appropriately,” the group said.
Rumours earlier this week that FirstRand could be a possible takeover target by the US bank — the world’s largest — saw a surge in the local bank’s shares and that of the country’s other major banks, with both Standard Bank and Absa touching all-time highs on Friday morning.
Fuelling the speculation, FirstRand reiterated this week that it is open to talks with any international bank, and will consider any proposal that makes good business sense.
Earlier on Friday, it was quoted in reports as saying it has held talks with several foreign banks, including Citigroup.
Since British banking group Barclays made its play for Absa, which it has subsequently succeeded in gaining control of, there has been mounting speculation about a second local bank possibly being taken over by a foreign entity.
Prior to giving the nod to Barclays’ takeover of Absa, both Minister of Finance Trevor Manuel and South African Reserve Bank Governor Tito Mboweni intimated that they might entertain the notion of a second foreign bank gaining control of a local one.
They stressed, however, that each case will be treated on merit and will have to tie in with the country’s four-pillar policy of having four major banks.
Standard Bank and Nedbank have both made it clear that they are not interested in selling out to foreign banks. — I-Net Bridge