British multinational bank HSBC is exiting SA in a process that will see it transfer its clients and banking assets and liabilities to the country’s most valuable banking group, FirstRand, and smaller rival Absa.
The London-based lender, which has had a presence in SA since 1995, said on Thursday that the deal — which will also see its SA branch employees transfer to FirstRand — was expected to be concluded in the last quarter of 2025.
HSBC and HSBC Europe CEO Colin Bell said the group’s existing international wholesale banking clients would continue to have connectivity through HSBC channels for their accounts in SA once they had transferred to FirstRand.
He said the lender had agreed with Absa and Absa Capital Securities to provide HSBC Bank’s global equities and securities finance clients with continued access to the SA market.
“Following a strategic review, we are pleased to have signed agreements with FirstRand and Absa. They both have extensive networks and are leading corporate and investment banks in the region. They will continue to provide clients with a broad offering in terms of service and products,” Bell said.
“HSBC’s legal entities in the country will be wound down, while ensuring all regulatory and customer obligations are met.”
HSBC Group established a presence in Sub-Saharan Africa in 1981 before later entering the SA market in the year following the country’s transformation to a democracy.
It comprises HSBC Bank’s Johannesburg branch, HSBC Securities and a representative office for the private bank. The bank’s principal activity in SA is providing banking services to its corporate and wholesale clients, it said.
“The agreement is an endorsement of our strategy, which emphasises providing our clients with best-in-class equities product and equity market access,” said Quintus Kilbourn, head of equities at Absa Corporate and Investment Banking. “It is also recognition of the depth of Absa’s client base and equities product.”
HSBC becomes the second major multinational bank to exit SA in the past six months.
BNP Paribas, the Eurozone’s biggest bank, in March wound down its corporate and investment banking services in SA, 12 years after launching its local foray. This comes as the banking giant ramps up its 2025 strategic plan announced in 2022 that made the most of its noncore Africa operation with a focus on consolidating its European and Asian business.
The Reserve Bank granted the French group permission in 2012 to set up a branch in SA in a move that caused the lender to convert its representative office into a full commercial branch, offering corporate and investment banking services.
A year before being granted permission, BNP Paribas bought a controlling stake in the stockbroking arm of Cadiz Holdings.
In its corporate and investment banking (CIB) and investment solutions activities, BNP Paribas enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia.
At the time, BNP Paribas, which has €2.6-trillion (R44.7-trillion) in assets, said the move would help it develop new clients in SA and the Southern African Development Community.
However, the Paris-based lender changed strategy in 2021 and announced plans to withdraw from most markets in Africa. At the time, the bank was present in SA, Algeria, Botswana, Namibia, Morocco, Senegal and Ivory Coast. It has since sold its subsidiaries in Burkina Faso, Mali, Guinea, Senegal, Tunisia and Ivory Coast.
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