Photo: Nedbank Group Ltd.'s headquarters complex in Johannesburg.
With special thanks to my friend Marius Neethling, who took and gave me permission to use this photo. Dankje!
Nedbank Group Ltd.
Nedbank Group is one of South Africa’s Big Four banks and gained prominence particularly in the early 2000s when it took over the BoE banking group. Nedbank’s direct lineage goes back to the 1888 establishment of the Nederlandsche Bank en Credietvereeniging voor Zuid-Afrika (NBCV) in Amsterdam, Holland. The bank’s name means “Dutch Bank and Credit Society for South Africa.”
The final decade of the 19th century was a turbulent one in South Africa, as the Second Boer War was fought by the British Empire against the Dutch, Germanic and French settlers of the Orange Free State and the Transvaal Republic between 1899 and 1902. Even though Britain won the bloody and deadly war in the end, the military campaign was very controversial towards the end, with many criticizing the brutal tactics of the British forces. Following Britain’s victory, the two Boer republics became British colonies. In 1903, NBCV dropped the Credietvereeniging part of its long name and became known as Nederlandsche Bank voor Zuid-Afrika (NBZA).
In 1910, the Union of South Africa was formed by the confederation of four British colonies: Cape of Good Hope, Orange River, Transvaal and Natal. When World War I broke out in 1914, South Africa was drawn into the European conflict with clashing ideologies. As part of the British Empire, the government supported Britain’s position against Germany and thus sent troops to attack the German Protectorate of South-West Africa (present-day Namibia). Yet many Afrikaners descended from the Dutch and Germanic settlers felt no hostility towards Germany. If anything, it’s the Afrikaners who suffered greatly under British hands during the two Boer Wars at the turn of the century. Supporters of the creation of a Boer South African Republic led a revolt known as the Maritz Rebellion against the British-led Union of South Africa. The rebellion was quickly suppressed, however, and South Africa successfully conquered South-West Africa in 1915 from Germany.
In 1925, the Nederlandsche Bank voor Zuid-Afrika took over the Transvaalsche Bank en Handelsvereeniging (“Transvaal Bank and Commerce Society”), which was founded in 1892. At the onset of World War II, the “anti-British, pro-Afrikaner” National Party opposed joining Britain to declare war on Nazi Germany, preferring to keep the country neutral. Those anti-British sentiments quickly dissipated, however, and South Africa joined the Allies forces against the Axis enemies.
- In 2000, the ailing FBC Fidelity Bank was rescued by the government and subsequently transferred to Nedcor. Nedcor integrated FBC Fidelity into its Peoples Bank unit, which caters to the low-income black population and is also a designated black economic empowerment (BEE) bank. By 2002, Nedcor had transferred 30% of Peoples Bank to a BEE consortium to reduce concentration of ownership by the old wealth and the white minority.
- Also in 2000, Nedcor Ltd. sought approval to combine with Standard Bank Investment Corp. Ltd. (“Stanbic”), the parent company of Standard Bank of South Africa. However, the South African Ministry of Finance vetoed the proposal.
- In 2001, Nedcor’s secondary retail banking brand, Permanent Bank, was combined with Old Mutual plc’s Old Mutual Bank with no cash changing hands. Nedcor and Old Mutual plc each owned 50% of the new Old Mutual Banking Services.
- Also in 2001, Nedcor acquired 50.1% of Imperial Bank, a vehicle finance firm founded by Imperial Holdings in 1996.
- Also in 2001, Nedcor bought Fleming Offshore Banking from JPMorgan Chase for ZAR 594-million (GBP 51-million). Fleming Offshore was based in the Isle of Man and Jersey. At the same time, Nedcor’s majority owner Old Mutual plc transferred its own Guernsey-based fiduciary business into Fleming Offshore, which was then re-named Gerrard Private Bank. When all transactions completed, Nedcor held 74.5% of Gerrard Private Bank, with Old Mutual plc holding the rest.
- Another major constituent that became part of Nedcor was the BoE Ltd., which traces its history to the 1838 establishment of a Cape Town trust company called the Board of Executors (as in the executor of a will and testament). In 1998, BoE took over NBS - Natal Building Society (established in 1882) and Boland PKS (established in 1900). The acquisitions proved ill-timed, as rising mortgage impairments severely undermined BoE NBS’ capital ratio. In 2002, a confidence crisis sent panicky depositors rushing to withdraw their money from the bank. Soon after the bank run, BoE Ltd. agreed to a buyout offer from Nedcor Ltd. worth ZAR 7.7-billion (GBP 485-million). By acquiring the No. 6 bank BoE, Nedcor became South Africa’s largest bank based on deposit.
- In October 2002, Nedcor Investment Bank bought the 50% stake of Franklin Templeton Nedcor Investment Bank Asset Management Ltd. it didn’t already own for ZAR 180-million (GBP 11-million).
- Also in 2002, Nedcor Ltd. acquired the 16% of Nedcor Investment Bank that it didn’t own from the public and Old Mutual plc for ZAR 685-million (GBP 43-million).
- In 2005, Nedcor Ltd. went back to its old name Nedbank Group Ltd.
- In 2007, Nedbank bought out its parent Old Mutual plc’s 50% interest in Old Mutual Banking Services. The now wholly-owned Old Mutual Bank would provide banking services to Old Mutual plc’s life insurance clients.
- In 2008, Nedbank and Ecobank Transnational Inc. announced an alliance to improve client and business relationships. Ecobank is a Togo-based, pan-African bank that operated over 600 branches across dozens of countries in middle Africa.
- In 2009, Nedbank bought the 49.9% of vehicle financier Imperial Bank that it didn’t already own from partner Imperial Holdings for ZAR 1.77-billion (USD $226-million).
- In August 2010, Anglo-Hong Kong banking giant HSBC Holdings plc announced that it was in talks to acquire 70% of Nedbank Group Ltd., including the entire 52% stake held by Anglo-South African insurer Old Mutual plc, for USD $7.3-billion. However, the talks ended two months later without a deal.
- In December 2011, Nedbank provided a three-year, USD $285-million facility to Ecobank Transnational Inc. with a call option that allowed Nedbank to subscribe to 20% of Ecobank between the 24th and 36th month after the closing of the transaction. The facility enabled Ecobank to acquire Oceanic Bank of Nigeria. By the end of 2011, Ecobank served over 8 million clients through over 1,100 branches.
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