Big international bank kisses South Africa goodbye

FirstRand has confirmed that it has received regulatory approval to take over HSBC South Africa’s clients, employees, and banking assets and liabilities.

This comes after the London-based bank announced in 2024 that it plans to exit its South African operations.

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

However, after nearly 30 years of operating in the country, HSBC announced in September 2024 that it plans to sell its local operations to Absa and FirstRand.

The bank reached this decision after a review of its global operations, which led to HSBC committing to sell its non-core assets to cut costs.

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

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

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

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

Under 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.

Absa previously said this agreement aligns with its growth ambitions, which include serving corporate and investment banking clients with access to equity markets and products.

“The agreement is an endorsement of our strategy, which emphasises providing our clients with best-in-class equities products and equity market access,” head of equities at Absa Corporate and Investment Banking, Quintus Kilbourn, said.

Absa’s agreement with HSBC came into effect on 26 September 2024. However, FirstRand’s transaction was more complicated.

FirstRand’s takeover of HSBC South Africa’s banking business is more complex because it includes the transfer of clients and banking assets and liabilities. 

In addition, HSBC’s local employees will also be transferred to FirstRand. 

HSBC’s exit

On Tuesday, 10 June 2025, FirstRand informed the market that its transaction with HSBC had received the necessary regulatory approvals.

The company explained that HSBC South Africa’s clients are mainly subsidiaries of multinationals operating in South Africa and some large domestic corporations.

Therefore, FirstRand’s corporate and investment (CIB) banking franchise, Rand Merchant Bank (RMB), will lead and implement the transfer. 

The company said this will ensure that the transferred HSBC clients will have ongoing access to corporate and investment banking services in South Africa.

“The transaction fits with RMB’s strategy to scale its corporate banking business and increase its share of multinational clients operating in South Africa,” RMB CEO Emrie Brown said.

The bank added that HSBC’s multinational clients headquartered outside of South Africa can continue to have connectivity through HSBC’s global digital channels.

These channels will allow multinational clients to access account visibility and payment initiation for their South African accounts once they have transferred to RMB. 

In addition, HSBC South Africa will service its branch clients until the transfer of the business is completed.

FirstRand confirmed that the transaction is expected to be completed on 31 October 2025.

With this transaction going full steam ahead, HSBC is joining a host of other international companies that have exited their South African operations over the past year.

In 2024 alone, seven international companies left South Africa completely or scaled back their local operations, including Shell, Rolex, AngloGold Ashanti, TotalEnergies, and BP.

In the financial sector, Europe’s second-largest bank, BNP Paribas, closed its South African corporate and investment arm in May 2024.

BNP Paribas had operated in South Africa since 2012 and offered corporate and investment banking services.

However, for the past few 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 a branch was withdrawn on 8 March.

“We can confirm that we have closed BNP Paribas Corporate Investment Banking in South Africa,” a spokesperson said in May 2024.