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HSBC in talks for controlling stake in South Africa's Nedbank

UK bank negotiating with Anglo-South African insurance company Old Mutual for 70 per cent stake in N

HSBC is in negotiations with Old Mutual, the Anglo-South African insurance company, to acquire its controlling stake in South Africa's Nedbank. If successful, HSBC will own 70 per cent of Nedbank for £4.4bn.

Nedbank, which is South Africa's fourth-largest bank, said HSBC was "an attractive international banking partner" as the British bank could enhance its ability to further strengthen its position in the South African banking sector.

The deal would also help HSBC increase its presence in South Africa. But there are concerns that with the growing number of acquisitions by foreign banks in the African nation's banking sector, the country's authorities might decide to intervene in the case.

The making of a binding offer is conditional to a thorough scrutiny of Nedbank by HSBC, and clearance of regulatory and other approvals.

The shares of Old Mutual rose 4.8 per cent to 126.8p while those of HSBC increased by 0.3 per cent to 635.8p, after the companies announced they were in talks for the deal.