Two banks kiss South Africa goodbye – with two more on the line

Two prominent banks, BNP Paribas and HSBC, left South Africa in 2024, and two others, Sasfin Bank and Bidvest Bank, announced big changes.

In May 2024, BNP Paribas South Africa closed its corporate and investment bank in the country after twelve years.

BNP Paribas, the second-largest European bank, has operated in South Africa since 2012 and offered corporate and investment banking services.

Over the last two years, BNP has been undergoing a process of limiting its operations in Africa to focus on its business in Asia and Europe.

South Africa’s banking regulator, the Prudential Authority, said in a statement that BNP Paribas’ ability to conduct the business of a bank via branch was withdrawn on 8 March already.

“We can confirm that we have closed BNP Paribas Corporate Investment Banking in South Africa,” a spokesperson said in May.

In September 2024, HSBC said it had exited its operations in South Africa after concluding deals with FirstRand and Absa to take over its two main divisions.

HSBC opened a South African office in 1995 and sought to capture the increasing value of global trade with Africa.

The bank sold its global equities and securities business in South Africa to Absa, while its corporate banking operation sold to RMB.

In terms of the agreement, Absa will provide HSBC and its clients with access to a full suite of equities trading and prime brokerage products in South Africa.

HSBC’s plan is part of its strategy to shed businesses in many parts of the world and boost investment in Asia.

“Following a strategic review, we are pleased to have signed agreements with FirstRand Bank and Absa,” Colin Bell, HSBC Bank plc and HSBC Europe CEO, said.

“They both have extensive networks and are leading corporate and investment banks in the region.”

BNP Paribas and HSBC followed other large global banks, including Barclays and Standard Chartered, scaling back their African operations.

Two local banks, Sasfin Bank and Bidvest Bank, have also indicated that they will not continue to operate as normal.

Bidvest Bank is currently up for sale, and its owner, The Bidvest Group, plans to find a buyer before the end of 2024.

Bidvest said following a portfolio review, it made a significant strategic decision to dispose of Bidvest Bank and FinGlobal.

When it first announced its plans to dispose of Bidvest Bank, the group said it had determined the financial services division to be outside of its core competencies.

“The opportunity to facilitate a step-change in value-creation for all stakeholders does not arise often,” CEO Mpumi Madisa said.

It is still unclear who would purchase Bidvest Bank and whether the company will be bought in parts or disposed of whole to any suitors.

In October 2024, Safin Holdings announced that it intends to exit its banking business by the end of 2025.

The company cited difficulties with increased regulatory complexity, compliance requirements, and associated costs.

It said these challenges rendered its banking business unable to generate an appropriate risk-adjusted return on equity.