Barclays to sell African operations over 2-3 years
Pauline Dikuelo | Wednesday March 2, 2016 18:00
Yesterday, the London-based Barclays Plc confirmed that they are divesting and selling their P55 billion stake in Barclays Africa over the next two to three years.
The group owns about 62.3 percent stake in the Barclays Africa Group, which in turn owns about 67.8 percent of Barclays Bank Botswana.
Barclays Africa operates as Absa in South Africa, but has retained the parent company in all other nine countries it has operations.
According to Barclays Bank Botswana managing director, Reinette van der Merwe the sale by Barclays Plc will not affect their operations here as they are part of the Barclays Africa group.
“There is no need to panic; the change of shareholders will be from the Barclays Plc, so nothing is changing especially that our infrastructure is integrated into the Barclays Africa Group. There is going to be minimal impact or none at all. Instead, I see this as a positive move which has been made purely for profit reasons,” said van der Merwe.
The Managing Director said it is clear from this announcement that Barclays Plc is reducing its shareholding in Barclays Africa due to recently introduced regulatory burdens specific and particular to Barclay’s Plc as a UK-headquartered and globally significant financial institution. In addition, van der Merwe noted that it is unlikely that one investor could buy all the shares hence the reason they will be selling pieces at a time.
Further, she said the vast difference and acceleration in the infrastructure development that has been visible at their branches is because of the technology they get from the Barclays Group for being one of their top five performing countries. This includes the improved systems in Barclay’s branches where the process of withdrawing cash or making deposit has improved.
“The technology that we use here is mostly part of the roll out from the Barclays Group, some infrastructure is stand alone but there is some that we share with the Barclays Group which we have benefited from them,” she indicated. However, the Botswana Bank Employees Union (BOBEU) general secretary, Lebogang Keabetswe said the disinvestment is confusing even though the bank is assuming that it will not have an impact on Botswana operations.
“BOBEU members have been panicking since the speculation went viral, because they are unsure whether to get worried or not because for the next two to three years we do not know which investors will take over and their expectations,” she said.
With many of the African operations branded Barclays, questions remain on the naming of its operations after Barclays sells out of Africa.
Fund manager, Korner Perspective director, Graeme Korner told Reuters there was little appetite in the market for a major banking transaction and also said finding a buyer for such a large stake will be challenging.
“Unless there is a really powerful player that has a deep balance sheet and can add strategic value to Barclays Africa, it’s not in the interest of minority shareholders to see it passed on to somebody else,” he said.
But another banker, who also spoke on condition of anonymity, said Chinese banks might be best placed to do a deal because they have stronger balance sheets than their European or U.S counterparts.