Barclays is leaving Africa with a final sell-off


United Kingdom’s banking major, Barclays Group said it has received the final go-ahead to sell its stake in its African unit.

The bank is represented in the continent through its Barclays Africa Group. As a sign that the bank will be leaving Africa for good, South Africa’s minister of finance has approved the deal, ABSA Bank said, paving the way for Barclays to begin selling its remaining 50 percent stake in Barclays Africa Group.

According to sources at Reuters, the Johannesburg-based ABSA Bank is the main business inside Barclays Africa Group. Barclays is also selling Barclays Bank Egypt and Barclays Bank of Zimbabwe, which sit outside Barclays Africa Group.

Barclays shares rose as much as 2.5 percent in London on Wednesday, after Sky News earlier reported the British bank would sell shares in Barclays Africa worth 1.6 billion pounds ($2.1 billion) as soon as Wednesday evening.

Barclays said in early 2016 it would sell its 50 percent stake in Barclays Africa Group as part of a strategy to refocus on the United States and Britain.

The bank gave itself two to three years to complete the deal and sold 12 percent into the market last May via an “accelerated bookbuild” process.
Barclays is partly relying on funds raised from the stake sale to meet capital requirements that were identified as a concern by the Bank of England in a November “stress test” aimed at gauging its ability to withstand financial shocks.

The planned sale would take Barclays’ interest in the Barclays Africa from 50 percent down to 28 percent, Sky News said.
Shares in Barclays Africa fell 4.5 percent in Johannesburg. Reuters said it could not immediately confirm the Sky News report about the timing of the stake sale.

“The South African Reserve Bank (SARB) has been engaging with Barclays Plc, BAGL and the Prudential Regulation Authority of the United Kingdom regarding the divestment process. These engagements have been constructive and are ongoing,” South Africa’s central bank said in an emailed response to questions ahead of the announcement by ABSA.

It would be recalled that Barclays was planning a comeback into Nigeria. The bank received a license way back on 2010, but it did not go ahead to start operations. Barclays cannot also comment if it has foreclosed its return to Nigeria.

Leave a Reply

Your email address will not be published.