| Two of South Africa's so-called big four banks are set to meet in a titanic court battle, the likes of which has not been seen before in the country, Business Live reported, quoting the opinion of local analysts. Absa, South Africas biggest retail bank, is suing the country's fourth-biggest bank, Nedbank, claiming ZAR 773.1mn (EUR 75.4mn) plus an annual interest of 15.5%, which it says is reparations for single-stock trading losses it suffered as a result of exposure to Pinnacle Point Holdings. Nedbanks subsidiary Syfrets bought in 2007 shares in a South African leisure and property company, Acc-Ross, later renamed to Pinnacle Point Holdings. It traded single-stock futures in the company on behalf of Cortex Securities, for which Absa was the clearing bank. Cortex Securities defaulted on payments in 2008 and Absa had to acquire a 27% stake in Pinnacle Point, which is the basis of its claim against Nedbank. Barclays-owned Absa claims that Nedbank did not get permission from the banking regulator to acquire Pinnacle and did not seek approval from the Competition Tribunal. Nedbank dismissed the accusations and said that it plans to defend the action. However, analysts say that a court drama would be to the detriment of both banks, as it would be expensive and would harm corporate and professional reputations. This is unless the banks lawyers decide to settle out of court and spare their clients the drama and public scrutiny associated with such high-profile cases, Business Day wrote. |
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