London / Johannesburg: Emerging markets focused bank Standard Chartered is in talks to buy South African bank Nedbank, Sky television reported on Wednesday, in a potential $10 billion deal.
Buying Nedbank would bulk up Standard Chartered’s presence in Africa’s biggest economy, which is increasingly seen as a gateway into the fast-growing continent. It is one of the country’s top four banks.
Nedbank shares rose 3.5% and Standard Chartered fell 2.3% by 0840 GMT.
Old Mutual, which owns a majority stake in Nedbank, gained 4% in London, where the shares traded ex-dividend, and were up 6% in Johannesburg.
Sky said talks had taken place between Standard Chartered and Nedbank, although they were at a relatively early stage. It said Goldman Sachs was advising Standard Chartered.
The South African government could be a stumbling block to any transaction, although Standard Chartered CEO Peter Sands was keen to pursue a takeover, Sky said, citing people close to the discussions.
Standard Chartered, Nedbank and Goldman Sachs declined to comment.
Old Mutual, which owns a 55% stake, said it had nothing to add to a strategy update given in March, when it unveiled a strategic overhaul that disappointed investors who had hoped for a more far-reaching shake-up.
The company has faced calls to refocus on insurance by selling its Nedbank stake.
Nedbank’s market value is just over $10 billion. This month, it forecast better 2010 earnings, helped by a rise in first-quarter fees and commissions.
Standard Chartered, based in London but deriving over four-fifths of its profits from Asia, last week said it made record first-quarter earnings.
Sands has steered the bank through the financial crisis relatively unscathed, underpinned by its reliance on Asia and traditionally decent capital and liquidity.