HSBC in talks to buy 70% of South Africa's Nedbank

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A worker is silhouetted against an illuminated sign in a branch of HSBC in the City of London
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HSBC more than doubled its profits in the first half of 2010

Banking giant HSBC has said it is in exclusive discussions to buy a controlling stake in South Africa's fourth-biggest bank, Nedbank.

HSBC and Anglo-South African insurer Old Mutual, which currently owns the stake, confirmed in separate statements that talks were taking place.

If the bid succeeds, HSBC will acquire up to 70% of Nedbank in a deal worth as much as 49.9bn rand ($6.8bn; £4.4bn).

Nedbank said HSBC was "an attractive international banking partner".

The deal would build on HSBC's existing presence in South Africa and fuel its ambitions to expand its reach in emerging markets.

But in the wake of other recent acquisitions by foreign banks, there are concerns that the South African authorities might see it as a deal too far.

Earlier this month, HSBC reported pre-tax profits of $11.1bn for the first six months of 2010 - more than double its profits for the same time last year.

The bank said it was profitable in every region except for North America, where it saw losses of $80m.

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