SA’s Nedcor in merger talks with Zim bank

JOHANNESBURG – South African banking group Nedcor said yesterday it had entered formal talks about a possible merger with Zimbabwe’s Trust Bank.

Nedcor unit Nedbank Ltd and the Zimbabwe unit of its majority owner insurer Old Mutual had signed a memorandum of understanding about the possible merger. The link-up would join Trust Bank with Merchant Bank of Central Africa, which is indirectly majority-owned by Nedbank and Old Mutual Zimbabwe, a statement said.”While Nedcor’s main focus continues to be on its South African banking operations, its strategy includes building a strong base throughout southern Africa,” the statement said.A crisis hit the banking sector in Zimbabwe last December, but institutions with strong controls such as Trust Bank benefited, Nedcor said.Zimbabwe’s central bank has indicated the need for consolidation in the sector.”This makes it an ideal opportunity for Nedcor to expand its operations in Zimbabwe at a relatively low cost,” Nedcor said.Trust Bank, which focuses on the corporate and commercial banking sector, has 14 branches, mostly in Harare and Bulawayo.Trust Bank shares closed at Z$36 on Wednesday, while Nedcor ended at R61,50 on Tuesday, before a holiday in South Africa on Wednesday for elections.- Nampa-ReutersThe link-up would join Trust Bank with Merchant Bank of Central Africa, which is indirectly majority-owned by Nedbank and Old Mutual Zimbabwe, a statement said.”While Nedcor’s main focus continues to be on its South African banking operations, its strategy includes building a strong base throughout southern Africa,” the statement said.A crisis hit the banking sector in Zimbabwe last December, but institutions with strong controls such as Trust Bank benefited, Nedcor said.Zimbabwe’s central bank has indicated the need for consolidation in the sector.”This makes it an ideal opportunity for Nedcor to expand its operations in Zimbabwe at a relatively low cost,” Nedcor said.Trust Bank, which focuses on the corporate and commercial banking sector, has 14 branches, mostly in Harare and Bulawayo.Trust Bank shares closed at Z$36 on Wednesday, while Nedcor ended at R61,50 on Tuesday, before a holiday in South Africa on Wednesday for elections.- Nampa-Reuters