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IMPERIAL Holdings is in talks about selling its 49,9percent stake in asset financier Imperial Bank to joint owner Nedbank Group, it said on Friday.
Imperial and Nedbank each own about 50percent of Imperial Bank, which provides loans for vehicles and property, and which had net interest income of R1,7billion as of December 31, last year.
Shares in Imperial rose nearly four percent after the announcement on Friday and one analyst said the deal would allow it to focus on its main activities of auto retail and rental and logistics.
"Selling the stake is probably part of a new strategy, and it might give them more time and energy to focus on its core business," one analyst said.
Imperial, which provided no further details about the discussions, said that, if concluded, the deal may affect the price of its shares.
Nedbank said a further announcement would be made in due course.
Analysts were unable to say how much Nedbank, South Africa's fourth biggest bank, would pay for the stake but said it made strategic sense for the bank.
"Nedbank provides funding (for Imperial Bank), it probably makes sense for them," a Cape Town-based analyst said.
The analyst said Nedbank would need to diversify Imperial Bank away from reliance on Imperial Group's auto and logistics businesses.
Nedbank currently provides risk management support to the joint venture, whilst Imperial provides access to its extensive network of business operations throughout South Africa. - Reuters