Barclays Africa Group Limited prepares to reduce it’s 62.3 percent holding to less than 20 percent in South Africa’s third-largest lender but the investment bank seek to expand its operation in Nigeria. The London based firm is still searching for insurance assets in Ghana as part of a strategy to be among the largest lenders on the continent. It still looks to entirely grow its Africa operations
The London-based bank’s shares won’t be “sold in the short term and a number of players will have a say in the process,” Barclays Africa Deputy Chief Executive Officer David Hodnett said in an interview in with Bloomberg in Johannesburg on Wednesday, without elaborating on who the buyers might be.
Regulator are looking for investors who who offers “long-term stability, it speculate on how the British bank will sell its stock
Barclays Chief Executive Officer Jes Staley is cutting about 1,200 investment-bank jobs, restructuring management and reducing dividends after profit fell in 2015. Barclays said March 1 it plans to sell down its interest in the Johannesburg-based lender, formerly known as Absa, over the next two to three years to reduce demands on the capital it needs to set aside for controlling the company.
Bob Diamond, the former CEO of Barclays, hasn’t directly approached the African lender on buying shares in the company, Hodnett said.
While the two companies will still operate an investment-banking joint venture, the African unit’s work with multinational corporations and its cash-equities business may be impacted by the parent’s withdrawal, he said.
Barclays Africa dropped 2.1 percent to 138.01 rand, compared with a 3.1 percent decline in the seven-member FTSE/JSE Africa Banks Index.
The British bank bought the South African business in 2005 and three years ago the Johannesburg-based unit acquired its parent’s operations in eight African nations, giving Barclays a presence in 12 countries on the continent with 12 million customers. The prospects for South Africa and Africa are “pretty solid,” Ramos said in an interview with the Wall Street Journal on Wednesday.
“To sell over 42 percent of the stake in Barclays Africa, the most efficient move for Barclays Plc would be to sell to another bank or institution, which could be negative for Barclays Africa in terms of systems, strategic direction and timing to integrate operationally,” Harry Botha, a banks analyst at Avior Capital Markets, said in a note this week. Other South African lenders and any global systemically important banks similar to Barclays would be unlikely buyers, he said.
The stake sale represents an about turn for Barclays, which has operated on the continent for more than a century. After firing former CEO Antony Jenkins last July, Barclays Chairman John McFarlane that same month traveled to South Africa to make clear his “very firm support for the Africa business,” Barclays Africa CEO Maria Ramos said at the time.