Barclays Bank completes deal to sell Africa operations

By James Anyanzwa

Barclays Bank Plc has agreed to sell its African operations to its South African subsidiary Absa Group.

The move is part of the British bank’s efforts to consolidate its functions in the sub-Saharan Africa.

Under the terms of the deal, Barclays will receive 130 million ordinary shares in Absa worth $2.1 billion (Sh178.5 billion) that will increase its holding in the South African lender from 55.5 per cent to 62.3 per cent.

The agreement also will combine most of Barclays’ African business units with those of the South African bank.

The merger includes operations in 10 African countries, including Ghana and Kenya, and will lead to Absa being renamed Barclays Africa Group.

The composition of the Board of Absa Group will also be reconstituted.    However, Absa brand will continue to be used for retail banking and card businesses in South Africa.

The proposed deal to combine Barclays’ operations with Absa’s divisions is expected to be completed during the first half of next year, subject to regulatory approvals across the affected jurisdictions.

“Bringing together Barclays Africa with Absa is an important step in furthering our ‘One Bank in Africa’ strategy and the goal to become the ‘Go-To’ bank in Africa,” said Antony Jenkins, Barclays Chief Executive.

“This transaction will give us a platform from which we can further grow our Africa business to the benefit of customers, colleagues, shareholders and the communities in which we operate.”

The merger is meant to create a leading Pan-African financial services business and a platform for further growth. The combined, JSE-listed business will serve more than 14.4 million customers through a network of more than 1,300 outlets and over 10,400 ATMs, employing more than 43,000 people across ten countries, which represent approximately 22.5 per cent and 30.5 per cent of Africa’s population and GDP respectively.

“This is a compelling and unique opportunity for us to further our ‘One Bank in Africa’ ambitions by combining with a leading sub-Saharan African banking franchise,” said Maria Ramos, Chief Executive of Absa Group and Barclays Africa. “We are  excited by the opportunities for growth across the continent and the geographically diversified earnings potential that a combined business would deliver.”

The latest transaction follows the steps taken by Absa and Barclays last year to integrate their African businesses from an operational and management point of view.

This initially involved consolidating the regional offices for Absa Africa and Barclays Africa in Johannesburg and establishing a combined Africa management oversight team, as well as introducing a global product strategy across the continent.  

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