Company Data
| Last traded |
R158.90 |
| Change |
R1.50 |
| % Change |
0.95% |
| Cumulative volume |
428,017 |
| Market cap |
R80.63bn |
| Last traded |
R19.23 |
| Change |
R0.32 |
| % Change |
1.69% |
| Cumulative volume |
6.05m |
| Market cap |
R106.96bn |
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Johannesburg - Old Mutual [JSE:OML] is not entertaining suitors for its stake in Nedbank [JSE:NED], but has stuck a noose around the neck of any growth plans the bank may have.
Paul Hanratty, head of Old Mutual Plc's long-term savings division, on Tuesday dismissed speculation the group was planning to offload its 52% stake in Nedbank. However, he made it clear Old Mutual would have preference if any division within the group required capital for expansion.
"At some point there is going to be competition for resources [capital]," said Hanratty.
There has been much speculation in recent months around the future of Nedbank, with international banking group Standard Chartered being tipped as a likely suitor.
"We have not been talking to Standard Chartered or anyone about Nedbank," Hanratty said.
These comments, however, place Nedbank in a catch-22 situation.
Earlier this year Old Mutual CEO Julian Roberts clearly laid out targets for businesses within the group, saying those which are unable to consistently deliver 15% return on equity (ROE) would be put up for sale or disposed of.
When Nedbank reported full-year results in March 2010, its ROE fell from 17.7% to 11.5%. The sector as a whole faces increased competition from smaller players and a barrage of regulatory changes, which mean it may have to hold higher levels of capital on its balance sheet in future.
If Nedbank cannot leverage capital off the Old Mutual balance sheet, this could hold it back from making acquisitions that could drive its growth path and improve its return to shareholders.
- Fin24.com