* HSBC ends talks to buy up to 70 pct of South African bank
* Blow for Old Mutual, but says not due to adverse findings
* HSBC exit could pave the way for StanChart - analysts
* Blows hole in Africa plans for "world's local bank"
* Nedbank down 6.1%, Old Mutual down 4.8%, HSBC down 1.4%
(Adds Nedbank CEO comment, updates share prices)
By Steve Slater and David Dolan
LONDON/JOHANNESBURG, Oct 15 (Reuters) - HSBC has ended talks to buy an $8 billion majority stake in South Africa's Nedbank, leaving it without a clear Africa strategy and handing an opportunity to rival Standard Chartered.
HSBC had been in exclusive talks with Anglo-South African insurer Old Mutual to buy up to 70 percent of Nedbank, South Africa's fourth-largest bank, under an eight-week period of exclusivity due to end on Monday.
Both HSBC and Old Mutual said in statements on Friday the talks had ended, without saying why negotiations broke down. Old Mutual said that, as far it was aware, it was not due to adverse findings during due diligence.
The deal may have been complicated by HSBC's recent change in its chairman and chief executive following a boardroom power struggle. Tougher rules on bank capital and potential resistance from South African officials might have also hurt the negotiations, analysts said.
Nedbank is also struggling with high levels of bad debts at its money-losing retail unit.
"The talks were undertaken on the premise that it would have given it optionality for growth in Africa," said Andrew Lim, analyst at Matrix in London.
"However, that was under the intentions of (outgoing CEO) Michael Geoghegan, and with the new management in place they might have thought that following through on the acquisition was too risky, given the potential loan losses and lack of certainty on the loan book."
Nedbank shares tumbled 6.1 percent in Johannesburg, while Old Mutual finished down nearly 5 percent in London. Shares in HSBC fell 1.4 percent, and StanChart added 0.6 percent.
Nedbank's chief executive, Mike Brown, told South African radio he didn't think HSBC found anything untoward when doing its due diligence.
"We don't believe they found anything digging around any of the filing cabinets," he said on Talk Radio 702.
The acquisition would have given HSBC, which has a limited presence in Africa, a gateway into the fast-growing continent, where other big banks are targeting its increasing trade with Asia. HSBC has said it needs a stronger presence on the resource-rich continent to live up to its claim to be "the world's local bank". Standard Chartered could now get another chance at Nedbank, analysts said. The emerging-markets lender was previously in talks to take a stake in Nedbank, sources have said.
StanChart on Wednesday announced a $5.3 billion rights issue, but said the funds would be used for organic growth and to meet tougher capital rules, not for acquisitions.
OUT OF AFRICA
Passing on Nedbank could be detrimental to HSBC's plan to grow in Africa, said Johann Scholtz, banking analyst at Afrifocus Securities.
"Nedbank would probably be their cheapest entry point into Africa and probably their least risky entry point.
"If they are concerned about the risk in Nedbank's book, then they are obviously not going into some of those Nigerian banks or some of those sub-Saharan banks."
Standard Bank, South Africa's largest lender, and Absa, its largest retail lender, already have substantial foreign owners.
The only other possible target in South Africa would be FirstRand, South Africa's second-largest lender.
"HSBC have made a strategic statement saying they are going to get involved in Africa, but I don't know how now," said Rob Nagel, senior portfolio manager at Cadiz Asset Management.
"A large part of the banking assets in Africa are sitting in Egypt, Nigeria and South Africa, and a lot of the Asian governments use South Africa as a springboard, so HSBC is obviously going to try some other way."
South African regulators, who have scuppered cross-border deals in the past, initially appeared open to the acquisition by HSBC. However, central bank chief Gill Marcus later warned that foreign ownership of local banks brought risks.
South African analysts said the acquisition would be a positive for Nedbank, which has struggled with a weak retail unit.
Saddled with bad debts, its retail arm reported a headline loss of 115 million rand ($16.9 million) in the six months to end-June.
The failed deal is also likely to be negative for the rand, which has gained on speculation of potential currency inflows.
The sale had been part of Old Mutual's strategy to refocus on insurance and asset management. The sprawling conglomerate, present in 35 countries, is under pressure from its biggest shareholders to reorganise amid concerns its complexity has held back its share price. (Additional reporting by Denny Thomas in Hong Kong and Myles Neligan, Victoria Howley and Karolina Tagaris in London; Editing by Will Waterman) ($1=6.807 Rand)