One of South Africa's major banking groups, Absa, has confirmed that it is investigating buying a stake in one of the largest commercial banks in neighbouring Mozambique, Banco Austral.

The group said on Tuesday that it was the preferred bidder for an 80% stake in the bank after submitting a tender to the Mozambican government.
 
However, the group said that contrary to "certain reports in the media," it had not yet made a final decision on whether to purchase the stake in Banco Austral.
 
A team from Absa had arrived in the Mozambican capital Maputo on Monday in order to conduct a due diligence on the bank, the group added. The team's study would probably be completed by the end of August but it was expected that negotiations would continue for some time, it said.
 
"It is too early to say whether we will go ahead with the deal," said Peter Gordon, Absa's head of international operations.

"We are moving ahead strongly but prudently into other areas of Africa outside of South Africa and the acquisition of Banco Austral could form a very important part of this strategy."
 
Banco Austral's interim chairman died at the weekend.
 
"We learned of the untimely death on Saturday of Antonio Siba Siba, the interim chairman of Banco Austral. Absa conveys its condolences to his colleagues and family. We do not believe that this unfortunate incident should in any affect our commercial approach to acquiring a stake in Banco Austral," Gordon said.