| When the South African government announced last month that HSBC Investment Bank was to be its adviser on privatization, it took the wind out of the sails of the major domestic banks. There was, though, still a local connection: HSBC subsidiary James Capel recently bought South African stockbroker Simpson McKie, now Simpson McKie James Capel. The snatching of the one-year advisory deal does not mean that South African banks are being altogether sidelined as foreign competition builds up. But it does show that local bankers no longer have it all their own way, which had been the case since such foreign banks as Barclays and Standard Chartered withdrew at the height of the sanctions and sold out extensive local operations. Since the April 1994 elections, 55 foreign banks have set up operations in South Africa, while others enter and leave on ad hoc tasks in what the local bankers call "parachute operations". None of the foreigners has so far attempted to get into the retail market. Local bankers believe only Citibank is capable of doing so, but doubt that it will at this stage. In general foreign competitors can't expect an easy ride. |