Old Mutual said the discussions centre on the sale of a 70 per cent stake in Nedbank. Shares in Old Mutual closed up 3.9p at 124.9p while HSBC shares rose 5p at 639.2p.

Old Mutual said the proposed sale, if agreed and approved by regulators and shareholders, would be a major step in its strategy to simplify its business.

The sale “is likely to result in a material strengthening of South Africa’s financial sector, foreign direct investment by HSBC in the banking sector and material incremental investment by Old Mutual in the long-term savings sector”, Old Mutual said in an announcement to the London Stock Exchange.

Ian Gordon, analyst at Exane BNP Paribas, said regulatory clearance of such a deal is not certain although South Africa has no rules prohibiting foreign companies from acquiring a stake of this size.

“Barclays was limited to 53.96 per cent of ABSA in 1985, (Chinese bank) ICBC acquired only 20 per cent of Standard Bank in 2007, and recent indications have suggested limited appetite to permit further majority acquisitions by International banks,” Gordon said. “So this is not yet a done deal.”

Original article by Victoria Thomson. Republished with kind permission from Scotsman.com

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According to research by BACS Payment in March 2009, payments owed to SMEs have risen by almost 40 per cent in the last year to £26 billion and many businesses are caught in an unsustainable cycle of companies billing quicker and taking longer to pay.

Figures show that SMEs are being forced to wait up to six weeks after the agreed payment date to receive payment.

Yet, says HSBC, just one in 10 businesses are currently using invoice finance to free up their cashflow according to research from HSBC Commercial Banking.

With cash released – in most cases – within one day of the invoice being issued, invoice finance makes funds available which can enable SMEs to respond quickly and decisively in challenging market conditions.

With the recession placing increased pressure on UK businesses – 64 per cent of SMEs say that managing cashflow in the current economic climate is their biggest challenge for growth.

Effectively managing cashflow is just one of the tips included in an online video launched by HSBC Commercial Banking which features a collection of stories from real businesses, practical advice from financial specialists and economists offering top tips on beating the credit crunch.

Noel Quinn, HSBC’s head of commercial banking UK, said: “We are urging businesses to ensure they have the right financial tools in place and are seeking appropriate advice to help them weather the storm. Ultimately a healthy cashflow is critical in a downturn and businesses do have the option, through invoice finance, of working with a financial partner to implement their payment collections on their behalf – allowing them to focus on the running of their business.

“We understand the pressure that businesses are under in the current climate and in a bid to alleviate some of the pressure we have already announced the availability of a £1 billion working capital fund which has been specifically designed to assist SMEs and make the day-to-day running of business more manageable.”

Contributed by BCR Factorscan www.factorscan.com