(Bloomberg) -- HSBC Holdings Plc agreed to sell its South African corporate branch unit to FirstRand Ltd. as part of its ongoing strategy to dispose of non-core assets.
The transaction is expected to be completed by the fourth quarter of 2025, subject to regulatory approvals, the UK lender said in a statement on Thursday without disclosing financial terms. Bloomberg News reported the sale talks earlier this month.
The deal involves the transfer of the branch’s clients, banking assets and liabilities and employees to FirstRand. In addition, Absa Group Ltd. has agreed to provide HSBC’s global equities and securities finance clients with continued access to the South African market.
The move is part of plans by Europe’s largest lender to shed businesses in many parts of the world and boost investment in Asia. HSBC has been operating in South Africa since 1995. The company recently sold its retail and business banking units in Mauritius to Absa Group Ltd. With the sale of its businesses across South Africa, HSBC would have largely exited sub-Saharan Africa.
FirstRand, the continent’s biggest lender by market value, has previously said it’s open to acquisitions in South Africa. The continent’s biggest economy has seen renewed investor interest after the formation of a new government earlier this year.
FirstRand said it will allocate the required capital to back the transferred risk weighted assets, which meet the group’s financial resources allocation principles. The impact on FirstRand’s CET1 ratio isn’t expected to exceed 20 basis points, it said.
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