Business

HSBC abandons bid for South Africa's Nedbank

A worker is silhouetted against an illuminated sign in a branch of HSBC in the City of London
Image caption HSBC has abandoned a potential £4.4bn deal to buy South African lender Nedbank

Banking giant HSBC has said it has ended talks with insurer Old Mutual over plans to buy its controlling stake in South Africa's fourth-biggest bank, Nedbank.

HSBC did not give a reason for abandoning the bid.

Old Mutual said HSBC's withdrawal was not, as far as it was aware, related to any "adverse findings" during HSBC's investigation of Nedbank.

The news sent the shares of Old Mutual and Nedbank lower.

In morning trade, Old Mutual shares were down 7% at 135.1 pence, while in Johannesburg Nedbank fell 9% to 133.35 rand.

HSBC said last month that it was talking to Old Mutual about buying its majority stake in Nedbank in a deal potentially worth 49.9bn rand ($6.8bn; £4.4bn).

The announcement that HSBC was ending talks came before this weekend's deadline for the completion of an eight-week period of exclusive discussions.

Europe's largest bank said that discussions about the potential acquisition had "not been successfully concluded", but added it remained committed to growing its business in South Africa

Analysts said the withdrawal put a question mark over the HSBC's Africa strategy and suggested rivals such as Standard Chartered could now bid for Nedbank.

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