Mary Vilakazi-led FirstRand gets approval to absorb HSBC South Africa

Key Points

• FirstRand secures final approval to acquire HSBC South Africa, including clients, assets, and staff, as HSBC exits amid tough local competition.
• RMB to lead integration, gaining key multinational and corporate clients; full transition expected by October 2025.
• Acquisition supports FirstRand’s strategic growth, with minimal capital impact and expanded reach in corporate banking.

FirstRand, a leading financial services group led by South African banker Mary Vilakazi, has received final regulatory approval to acquire the local operations of HSBC (HSBC South Africa), including its client base, assets, liabilities, and staff.

The move follows HSBC’s announcement on Sept. 26, 2024, to exit the South African market, citing difficulties in gaining ground amid stiff competition from entrenched local players. The deal marks a significant step for FirstRand, especially in strengthening its position among large South African corporates and multinational firms doing business in the country.

Corporate banking expansion led by RMB

At the heart of the transaction is Rand Merchant Bank (RMB), FirstRand’s corporate and investment banking arm, which will lead the integration. RMB will take over HSBC South Africa’s clients, most of whom are multinational subsidiaries and large local corporates. The process is expected to be completed by Oct. 31, 2025.

Clients affected by the transfer will continue to have access to critical corporate banking services during the transition. Those headquartered outside South Africa will retain access to HSBC’s global digital platforms for viewing accounts and initiating payments in South Africa, even after the handover to RMB is finalized.

RMB CEO Emrie Brown said the transaction fits well with the bank’s plan to grow its corporate banking footprint. “This is an opportunity to serve more multinationals operating locally and to support the broader growth of our corporate banking business,” she noted.

FirstRand has committed to providing the capital needed to support the additional risk-weighted assets tied to the acquisition. The group said the impact on its Common Equity Tier 1 (CET1) capital ratio will be modest, less than 20 basis points, consistent with earlier guidance. The acquisition not only supports RMB’s growth goals but also fits within FirstRand’s broader strategy to expand its presence in high-value segments of the banking market.

A legacy of growth and adaptation

FirstRand’s growth story dates back to 1977, when it was co-founded by Laurie Dippenaar. Over the years, the group has become one of Africa’s most influential banking institutions, with a market capitalization of $23.97 billion. Dippenaar’s leadership helped shape the group’s values and vision, and his impact endures through initiatives like the Laurie Dippenaar Scholarship, which supports talented young Africans.

As Africa’s financial landscape shifts, FirstRand is staying focused on new opportunities, particularly in private banking and advisory services. These areas are becoming increasingly important to the group’s long-term strategy as it looks to expand beyond its home market. This latest move not only adds scale to RMB’s operations but also reflects FirstRand’s ongoing effort to build a stronger, more diversified banking business across the continent.