Barclays forks out Sh104b in exit plan

A Barclays Bank ATM outlet in Nairobi's Loita Street. The bank has closed several branches as part of its restructuring programme. [Photo: File, Standard]

Barclays PLC has paid £765 million (Sh104 billion) to Barclays Africa to fund the cost of separating from the South Africa-based group.

The group, which owns Barclays Bank of Kenya and also has a presence in 11 other countries, said on Friday it had embarked on consultations that would culminate in dropping the name ‘Barclays’ by 2020. According to Barclays Africa Chief Executive Maria Ramos, the group was cautious not to damage the attachment that customers have to its banks spread in 12 countries on the continent.

“We have three years before we do brand change. The way we do the change is important because the brand is a promise of value and quality of the services we offer,” said Ms Ramos in a teleconference from South Africa during the release of the bank’s half-year results.

The group, she said, believed that even though separating from Barclays PLC would impact its near-term returns, the longer-term targets remained within reach. In Kenya, the Group Managing Director Jeremy Awori has had to clarify several times that rebranding would not result in the lender closing shop altogether.

Ms Ramos said the group’s decision-making channels would now ride more on technology to ensure timely response to the needs of markets such as Kenya where disruption was happening.

“We appreciate the uniqueness in each market and we want to respond quickly to the dynamics in each of them. Now we are clear that we want to expand the business, we want to be more technology-driven,” she said. In the group’s half-year results, its headline earnings increased by seven per cent to R7.8 billion (Sh63 billion).

This was the first time for the group to report its own results following Barclays PLC’s sell-down of its majority stake in the African business.

As part of its divestment from Barclays Africa from 62.32 per cent to 16.42 per cent, Barclays PLC had to part with £765 million to fund the separating exercise.

“This contribution will be invested primarily in rebranding, technology and separation-related projects and it is expected that it will neutralise the capital and cash flow impact of separation investments on the group over time,” said the lender.