Barclays board discusses future of African units

BARCLAYS Plc`s board is reportedly engaged in a series of meetings in London, where the future of its African units is being discussed.

The new Barclays Plc Board led by chair John McFarlane has been agitating for the business to focus on the more profitable operations in the US and the UK.

Mr McFarlane was instrumental in the ouster of former Barclays chief executive, Antony Jenkins after three years at the helm and has been pressuring new chief executive Jes Staley who took over the business on December 1 last year to devote more attention to the US and UK units.

Barclays has operations in Egypt and Zimbabwe, which form part of its African business portfolio. In addition, the British bank also holds a 62,3 percent stake in the South African domiciled Barclays Africa Group which has a majority shareholding in eight banks on the continent, including Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda and Zambia.

Results of these meetings are expected to be made public on March 1 when chief executive Jes Staley announces his Africa strategy, together with Barclays Plc’s financial results for the just ended financial year. People familiar with the matter suggest that options on the table include a sale of Barclays Plc’s entire holdings in Africa. According to the bank’s annual report, 14 percent of its total assets are in Africa, representing close to $75 billion at the end of Q3 last year.

Profits have been dipping in Africa, as economic growth on the continent has slowed down, with pretax profits for the region falling 7,7 percent in Q3. Earnings for the Zimbabwean unit have followed this trend, on the back of a deteriorating economic environment.

In the half year to June 2015, Barclays Zimbabwe`s attributable profits fell 25,22 percent from $1,7 million in 2014 to $1,3 million in 2015.

Barclays Plc is also reportedly contemplating the disposal of its Egyptian unit after it suspended plans to incorporate it into the main-line Barclays Africa Group. However, the final decision on the proposed sale of the Egyptian unit has not yet been reached.

In the past, Barclays Africa Group has failed to reach an agreement with its parent company Barclays Plc, to acquire both the Zimbabwe and the Egyptian units, after the two were excluded in a deal which saw Barclays Africa Group acquire majority stakes in eight of the parent company`s banking units across the continent.

Last week, Barclays Plc agreed to pay a $2,5 million fine to the US Department of the treasury’s Office of Foreign Assets Control (OFAC) after it violated restrictions on processing transactions for government-backed entities in Zimbabwe. — Wires

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  • sherman

    I am searching my mind, didn’t Kasukuwere add foreign banks to the INDIGENISATION list of institutions, to take 51 Percent up front…….. If he did, I am sure INDIGENISATION is playing a major decision of possibly pulling out of Zimbabwe.

    • mpengo

      No. Please read. You want to slap politics on everything.

      How dull can you honestly be?

      • sherman

        Mpengo: I thought Kauskuwere was involved with the INDIGENISATION of banks. I tracked the attached information, and it does indicate that Saviour was putting the screws to the banks in 2013. Just when we need foreign money to help elevate the economy he throws a wrench into the system. well now it appears Barclays has had enough and considering pulling out of Zimbabwe. Current unemployment in Zimbabwe is about 90 Percent…… I have one question, How is INDIGENISATION helping the economic situation in reducing UNEMPLOYMENT………….

        http://mg.co.za/article/2013-01-18-00-zim-indigenisation-will-cause-banks-to-divest-executive-says