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HSBC, a major UK bank, is in talks to sell its corporate banking unit in South Africa to FirstRand’s Rand Merchant Bank.

This move is part of HSBC’s global plan to focus on its main business areas and get rid of parts that are deemed non essential.

While it is only ‘discussions’ that are happening (there is no final agreement as yet), there do seem to be firm plans by HSBC to sell. HSBC is also apparently also looking to sell its SA equities business. Recently, HSBC has been on a spree selling off its operations in various countries around the world, such as its recent sale of its retail banking services in Mauritius.

FirstRand, on the other hand, is looking to expand locally and is interested in buying more businesses as they see South Africa’s economic outlook improve.

Given South African’s complex political position, sitting straddling the fence between BRICS on one hand and the US & the EU, some foreign owned entities are having to rethink their long term strategies in the country. This is also true of other countries on the continent. Several foreign banks are now slowly scaling back their presence in Africa, with only a few European banks, like Deutsche Bank, still operating at scale in the region.