Markets await key Barclays� decision on Africa

Brian Benza | Tuesday March 1, 2016 15:05

In a statement, Barclays Africa said any announcement by its London-listed parent company will not impact the shareholding and ownership of operations in individual African countries, including Botswana.

This follows an announcement by Barclays Plc on Sunday that its board was evaluating strategic options in relation to its shareholding in its African business.

The British bank, which holds a 62.3 percent in Barclays Africa worth R78 billion (P55 billion), is expected to update the market on its plans for Africa today (Tuesday). Barclays Africa, which has a 67 percent shareholding in Barclays Bank Botswana, said it was well capitalised, that it had an independent board and that it will continue to operate as normal.

Barclays Africa Group chief executive, Maria Ramos said the company remained committed to Africa.

“With an independent board and a separate listing on the JSE, we are deeply rooted in Africa and remain firmly in control of our future.

“We continue to be optimistic about our prospects in Africa, where we have a strong franchise with assets of over R1 trillion. We are deeply committed to the success of our continent. Our destiny is in Africa,” Ramos said.

Last Friday, the Financial Times reported that Barclay Plc’s chief executive, Jess Staley had decided to shut operations in Africa and had appointed a sub-committee to study the sale process.

Slowing economic growth in emerging markets coupled with the effects of a falling Rand has seen Barclays Africa Return on Equity falling to 9.3 against a target of 11 percent.

This has motivated the British bank to change focus to its core markets of the U.S and Europe, reports say.

Under a deal concluded three years ago, Barclays handed over the ownership of eight African businesses to its South African subsidiary in exchange for the 62.3 percent ownership in Barclays Africa.

South Africa’s Public Investment Corporation (PIC), which manages about R1.5 trillion in assets on behalf of the Government Employees Pension Fund (GEPF), told BDlive in January that it was keen to increase its 5.4% stake in Barclays Africa if Barclays wanted to sell down its holding.

A Barclay’s sell-down is seen as an opportunity for South African investors to reclaim the banking asset from British control. The PIC is the biggest South African investor in Barclays Africa, with its stake valued at about R6.5bn.

Investment bankers said there were no obvious strategic buyers for the African business. Barclays, which opened its first branch in Botswana in 1950, employs 1,200 workers in its 41 branches in the country.