HomeNewsUK’s HSBC to control MBCA Bank

UK’s HSBC to control MBCA Bank

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HSBC Holdings plc, the largest lender in Europe, is in equity talks to buy 70% of Nedbank Limited, the majority shareholder of Zimbabwe-based MBCA Bank.
Through the deal, which is still to get regulatory approval in South Africa, the largest lender in Europe would gain control of MBCA Bank and a foothold in the financial sector of the largest economy in Africa.
Nedbank last year bulked up its stake in MBCA to 74% from 50% through a rights issue floated to recapitalise the bank in terms of the Reserve Bank of Zimbabwe’s minimum capital requirements of $12,5 million.
The equity offering also boosted the commercial bank’s funded capital to build its Tier-1 capital critical for onward lending and financial strength in Zimbabwe’s “dollarised” environment.
HSBC has reportedly announced it would buy 70% of Nedbank in a deal estimated at $6,8 billion.
The London Stock Exchange (LSE)-listed financial services firm sees lucrative lending business in South Africa and Zimbabwe, and considers its anticipated equity interest in Nedbank as a vital entry point into the resource-rich African market.
The lender is understood to have shifted its focus from Europe to join the scramble for “rich pickings” in emerging markets.
In a parallel deal, Old Mutual South Africa reportedly disclosed that it would completely pull out of Nedbank in a deal estimated to be worth about R49,9 billion or $6,84 billion.
The largest savings company in South Africa controls 52% of the fourth largest lender in the country.
HSBC is expected to buy out Old Mutual South Africa and grab an additional 18% interest from minorities.
The two deals would radically change Nedbank’s shareholding structure and the market expects the parties to seal the transactions quite soon.
The news of the deals spurred the three investors into a rally in yesterday’s trades on the LSE and Johannesburg Stock Exchange (JSE).
Old Mutual surged 4,13% to 14,38 rand and Nedbank by 6,75% to 138 rand on JSE, while HSBC shares opened 0,3% higher on LSE.

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