UPDATE 2-Namibia blocks S.African Absa's bid for top bank

By Servaas van den Bosch

WINDHOEK, July 2 (Reuters) - Namibia's central bank on Friday blocked a bid by South Africa's Absa to gain control of the country's biggest bank, citing concern about foreign dominance of its financial industry.

The move is a setback for Absa, which is majority owned by Britain's Barclays. Like many other South African lenders, Absa is keen to push into fast-growing markets across the continent due to stiff competition and a more mature market at home.

Absa had bid for at least 70 percent of Capricorn Investment Holdings, according to a statement from the Bank of Namibia. Capricorn owns 72 percent of Bank Windhoek, the southern African nation's largest bank and the only one controlled by locals.

'The Bank of Namibia is concerned that should the transaction be approved, all domestic banks will be majority foreign owned, which is not in line with the national development objectives,' central bank governor Ipumbu Shiimi told reporters on Friday.

Absa has not said how much it planned to pay for the stake, which would have given it at least 50.5 percent of Bank Windhoek. Absa rivals Standard Bank, FirstRand and Nedbank all have majority stakes in Namibian lenders.

'This could further expose the Namibian banking industry to a single-country risk, a situation that is not desirable,' Shiimi said.

Absa said it was 'disappointed' and would study the decision further.

Bank Windhoek has more than 13 billion rand ($1.7 billion) in assets.

Its rivals include Standard Bank Namibia, FNB Namibia and Nedbank.

Absa Chief Executive Maria Ramos told Reuters last week the banks was 'constantly on the lookout' for an acquisition in oil-rich Nigeria, Africa's most populous nation.

Shares of Absa closed 0.9 percent higher at 122.59 rand while Johannesburg's Top-40 index ended up 1.3 percent.

(Writing by David Dolan; Editing by Erica Billingham) (For more Africa cover visit: http://af.reuters.com/ -- To comment on this story email: [e-mail]) ($1=7.732 Rand) Keywords: ABSA NAMIBIA/ ([e-mail]; [phone] Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.