Barclays confirms sale of Africa unit

Barclays Bank has confirmed it will wholly pull out of Africa, selling its 62.3 per cent stake in the Africa business unit 

By Othman Semakula & Jonathan Adengo
Posted 


Tuesday, March 1 

2016 at 

12:09

Barclays Bank has confirmed it will wholly pull out of Africa, selling its 62.3 per cent stake in the Africa business unit.
While releasing the bank’s group results on Tuesday morning, Mr Jes Staley, the Barclays Bank Group chief executive officer told BBC that the decision on Africa had not been easy, “but we have to make some very difficult decisions if we are going to get Barclays into focused, clear, compelling business model that generates returns for our shareholders.”

He also reaffirmed the strength of the Ugandan subsidiary, which he said: “…places like Uganda and Kenya the brand of Barclays is as strong there as it is in the UK.”
However, he added there was need to simplify its (Barclays’) business by focusing on two main core divisions – Barclays UK and Barclays Corporate and International.

The bank, however, said the exit will be a phased process that is likely to end in two or three years.
The move would mean that the Barclays Africa cluster, including the Ugandan subsidiary is likely to have a new owner.
The UK-based bank owns 62.3 of Barclays Group Africa that is spread in 12 markets including Uganda, Kenya, Tanzania, Botswana, Ghana, Mauritius, Mozambique, Seychelles, South Africa, Zambia, Egypt and Zimbabwe.

Other major shareholders include Public Investment Corporation (5.44 per cent), Sanlam Investment Management (2.30 per cent), StanLib Asset Management (2.18 per cent) and Dimensional Fund Advisors (1.51 per cent) among other.
The Barclays Africa Group is a listed entity on the Johannesburg Stock Exchange.
The bank also reported a drop in the group’s full-year profits for the year ended December 31, 2015, falling by 2 per cent to £5.4b (Shs25.1 trillion).

However, the Africa business unit reported substantial growth earnings which rose by 17 per cent to R2.3b (Shs488. 5b) for the rest of Africa with the South Africa unit rising by 8 per cent to R12b (2.548 trillion)
In a teleconferenced media briefing in Kampala on Tuesday Mr Maria Ramos, the Barclays Group Africa chief executive officer told journalist: “We delivered solid results, demonstrating that our strategy is working. Our ambition to be Africa’s leading bank remains unchanged.”

He also said Barclays Africa Group was a solid and sound company which is “well-capitalised and independently funded business that is uniquely positioned to achieve our goals across the continent”.
Mr Ramos further noted that while the shareholders are changing, the bank’s “destiny is in own hands, referring to the Africa business cluster.

“Today, we embark on our next chapter to shape our future,” he said.
In a review conducted in December 2015, Barclays concluded it was time it quit Africa to concentrate on its core markets including United Kingdom and the US.
The review highlighted Africa’s fading fortunes resulting from sinking oil prices, falling commodity prices and the heavy depreciation of the South African Rand, which has depreciated by 25 per cent in the last year.

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