FirstRand has confirmed it has received the necessary regulatory approval to take over the clients from HSBC South Africa, setting 31 October 2025 as the date to finalise the exit.

Under the transfer, HSBC’s clients, banking assets, liabilities and employees will be moved to FirstRand, under its corporate and investment franchise, Rand Merchant Bank.

UK-based HSBC bank announced in September 2024 that it would be closing up shop in South Africa after 30 years. The group started its local operations in 1995.

According to FirstRand, the clients of HSBC South Africa are mainly subsidiaries of multinationals operating in the country and some large domestic corporates, making a good fit for RMB.

“This will ensure that the transferred HSBC clients will have ongoing access to corporate and investment

banking services in South Africa,” the group said.

HSBC’s multinational clients headquartered outside of South Africa will continue to have connectivity through HSBC’s global digital channels for account visibility and payment initiation for their South Africa accounts once they have transferred to RMB.

HSBC South Africa will still service its branch clients until the transfer of the business is completed. The full exit is expected to be completed by 31 October 2025.

Emrie Brown, Chief Executive Officer, RMB, said: “The transaction fits with RMB’s strategy to scale its corporate banking business and increase its share of multinational clients operating in South Africa.”

FirstRand said it will allocate the required capital to back the transferred risk-weighted assets, which meet the group’s financial resources allocation principles.

“As previously guided, the impact of this allocation on FirstRand Limited’s CET1 ratio is not expected to exceed 20 bps,” it said.

HSBC is one of five international finance groups that have made a move to the door or to downsize their operations in South Africa.

BNP Paribas SA officially closed its corporate and investment bank in South Africa in May 2024.

Barclays Plc and Standard Chartered Plc have both scaled back in Africa, while rival Societe Generale SA is also cutting its footprint on the continent.

Local banks are also trimming or transferring their operations, with Sasfin Bank closing its Business and Commercial Banking (BCB), and Bidvest Bank being offloaded to Nigeria’s Access Bank.

However, even as some banks scale down, new local banks are expected to open at the same time.

Old Mutual’s OM Bank is on track to launch later this year, while several smaller banks are also expected to launch and start trading in 2026 and beyond. (BusinessTech)