UPDATE 2-S.Africa's Imperial may sell bank stake to Nedbank

* In talks with Nedbank

* May sell 50 pct stake in Imperial Bank

* Imperial shares up 2 pct, Nedbank up 1 pct

(Adds background, analyst quote, shares)

By Tiisetso Motsoeneng

JOHANNESBURG, May 29 (Reuters) - South Africa's Imperial Holdings Ltd (IPLJ.J) is in talks about selling its 49.9 percent stake in asset financier Imperial Bank Ltd to joint owner Nedbank Group (NEDJ.J), it said on Friday.

Imperial and Nedbank each own about 50 percent of Imperial Bank, which provides loans for vehicles and property, and which had net interest income of 1.7 billion rand ($213.3 million) as of Dec. 31, 2008.

Shares in Imperial (IPLJ.J) rose nearly 4 percent after the announcement and one analyst said the deal would allow it to focus on its main activities of auto retail and rental and logistics.

"Selling the stake is probably part of a new strategy, and it might give them more time and energy to focus on its core business," one analyst said.

By 1134 GMT, shares in Imperial Holdings were up 2.01 percent to 59.98 rand, outpacing a firmer JSE Mid-cap index .JMIDC, while Nedbank stock was up 0.93 percent to 91.39 rand.

Imperial, which provided no further details about the discussions, said that, if concluded, the deal may affect the price of its shares. Nedbank said a further announcement would be made in due course.

Analysts were unable to say how much Nedbank, South Africa's fourth biggest bank, would pay for the stake but said it made strategic sense for the bank.

"Nedbank provides funding (for Imperial Bank), it probably makes sense for them," a Cape Town-based analyst said, adding Nedbank would need to diversify Imperial Bank away from reliance on Imperial Group's auto and logistics businesses.

Nedbank currently provides risk management support to the joint venture, whilst Imperial provides access to its extensive network of business operations throughout South Africa. ($1=7.971 Rand) (Reporting by Tiisetso Motsoeneng; editing by Simon Jessop)