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Johannesburg - Analysts have begun to speculate that life insurer Old Mutual's new CEO Julian Roberts will begin to look for a suitor for its South African banking unit Nedbank.
Old Mutual's 53% stake in the banking group is conservatively valued at about R24bn.
Stockbrokers Barnard Jacobs Mellett said in a note to clients on Thursday morning that it believed Old Mutual has now "effectively become a break-up play, with Roberts possibly taking steps on his own to either dispose of problem businesses, unbundle non-core businesses or potentially being forced to do so by shareholders".
Portfolio manager Patrice Rassou of Sanlam Investment Managers agrees that corporate action around Nedbank is now a possibility: "I think that strategically, Nedbank benefits from having another parent which, for instance, could partner with it to seek out growth opportunities in Africa."
However, Rassou did caution that it would not be easy to find a buyer for Old Mutual's R24bn stake in the banking group.
This problem is compounded by the fact that the South African Reserve Bank has regulations that prohibit foreigners holding more than 60% in major banking institutions in South Africa. This reduces the pool of potential buyers.
At close of trade on Thursday, the Old Mutual share was trading down 1.1% at R13.50.
Banks in the sector were sold down heavily on the back of negative global sentiment.
Nedbank dropped 2.2% to R104.50, Standard Bank lost 4.9% to R88.90, First Rand was down 4.8% to R16.69 and Absa lost 4.6% to R107.80.
- Fin24.com