Barclays meets CBK Governor Patrick Njoroge over flower girl remark

South African owners of Barclays Bank of Kenya met with the banking regulator Saturday to discuss the exit from the British parent company. The meeting came after a protest by Patrick Njoroge, the Central Bank of Kenya Governor, about the ‘quiet’ exit of Barclays Plc from the oldest lender in the country.

Barclays Africa Group Deputy MD David Hodnett (2nd left) responding to questions from journalists during Barclays Bank AGM as BBK Chairman Francis Okomo-Okello (left), MD Jeremy Awori and CFO Yusuf Omari (right) follow keenly. [photo: courtesy]

David Hodnett, the deputy chief executive of Barclays Africa Group (BAGL), told Weekend Business that the agenda of yesterday’s meeting was to address concerns raised by Dr Njoroge. “We appreciate that the questions being raised by the CBK are the right questions; it has only been a question of when to have the meeting,” Mr Hodnett said after BBK’s Annual General Meeting held on Friday.

Several unnamed bidders are in negotiations with Barclays Plc over the acquisition, which could be completed within the year. Hodnett laughed off acquisition proposals made by Kenyan banks on BBK, citing that the individuals businesses were not up for sale.

“We are not open to splitting up any of the businesses for sale in the different countries,” he added. BBK has at least 18 months to operate under the brand name ‘Barclays’ after the disposal of the African business BAGL – where its holds the controlling stake.

Mr Hodnett said there were contractual agreements relating to the use of the brand to allow time for the transition of the banking business after the prospective owners come in. Last month, Barclays Plc sold 12.2 per cent stake it owns in BAGL in a transaction estimated Sh90 billion as part of a broader plans to exit Africa fully, if not to retain a minority stake.

SA’s public pension fund was the buyer in the deal. BBK was until five years ago the biggest bank in Kenya, and is the second most important subsidiary to BAGL after the SA business, in profits and assets.

Dr Njoroge’s fears about the exit by Barclays Plc relate to the profile of the buyer, specifically because Barclays is the fourth largest bank in Kenya. In a recent interview, the CBK boss said Barclays Plc had left his agency as ‘flower girls’ in its exit schedule.

New entrants

Njoroge had said his office must be involved in exit of Barclays PLC from its operations in Kenya. His fears were about the recent part sale of the African business by the British parent company of Barclays Bank of Kenya relate to the possibility of the buyer stripping the business of its assets before going away. “It is a legitimate concern that the buyer could only be interested in stripping the business off the assets,” Dr Njoroge said.

Njoroge added that his office should vet any new entrants in Kenya’s banking sector. “We should know if such a person has the ability of running a banking business,” he added, pointing to a possibility of sanctions which he did not identify.

While the shareholding of BBK held by BAGL remains at 68.5 per cent, the buyer in the eventual sale transaction would in effect become a significant shareholder in the Kenyan business.