Absa Group Ltd. is in talks to sell part or all of its asset-management business to Africa’s largest insurer, a deal that could create a firm with more than 900 billion rand ($65 billion) in assets, according to people familiar with the matter.

South Africa’s third-largest lender is in discussions with both Sanlam Ltd. and partner African Rainbow Capital Investments Ltd. about a deal, said the people, who asked not to be named because the discussions are private. No decision has been reached and an agreement may not be concluded, they said.

A combination of the Absa business with the Sanlam-owned equivalent would become one of the country’s largest money managers, behind the state-owned Public Investment Corp. The negotiating parties see room for further growth as the sector is otherwise populated with a number of small players, the people said.

Absa and Sanlam declined to comment. ARC, the investment vehicle of South African billionaire Patrice Motsepe, said it couldn’t comment on any talks with potential new partners.

The talks are taking place after Absa announced a decision to unwind its $6 billion money-market mutual fund, citing risks to the bank due to clients’ belief its investments held the same degree of safety as cash in a savings account. The move fueled speculation that Absa may really be looking for a buyer.

Absa is currently being run by interim Chief Executive Officer Jason Quinn after former head Daniel Mminele quit following a disagreement over strategy last month.

African Rainbow Capital last year acquired a 25% stake in Sanlam’s asset management arm. At the end of last year, Sanlam Investments had about 649 billion rand in assets under management.

Absa’s investment management unit oversaw 263 billion rand at the end of December.