Barclays will not rebrand to Absa

Brian Benza
Staff Writer | Friday August 24, 2012 00:00

 

Barclays PLC, which has a 67 percent controlling stake in Barclays Bank Botswana (BBB) on Tuesday announced that it is in talks about combining its African operations with that of the Absa Group, in which it holds 55 percent.

The move is aimed at accelerating expansion on the continent. The proposal would see Barclays wrapping its subsidiaries, Ghana, Tanzania, Uganda, Zambia and the Indian Ocean into Absa while its majority interests in the listed Botswana and Kenyan concerns will be merged with the South African bank.

While the move might result in Barclays subsidiaries in other countries being totally taken over by Absa, the British bank on Wednesday said that the BBB will not change names and its listing on the local bourse will remain in place.

'The process is still at an early stage, the final structure of any potential combination is subject to ongoing discussions. Details of the combination will be revealed when it is fully negotiated and agreed. Barclays has no intention of rebranding Barclays Bank of Botswana and we can confirm we intend to retain its listing on the Botswana Stock Exchange.

'Only Barclays holdings in Barclays Bank of Botswana would be included in the proposed combination,' said BBB acting head of corporate affairs, Grace Mosinyi.This means that the 67 percent stake held by the parent company in BBB will be transferred to Absa along with the other African subsidiary for cash or shares as the British bank would seek to increase its stake in the bigger South African banking group.

Former Barclays CEO Bob Diamond was last year quoted in the Financial Times as saying he would want to raise Barclays' shareholding in Absa from 55 percent to as much as 75 percent. At the moment there is no certainty that these discussions will lead to a combination, as the deal has to get regulatory approval in the several countries that will be affected.

The proposed combination would not be expected to be completed until 2013. 'This proposed combination of the majority of the Barclays Africa businesses with Absa is the next logical step in delivering our 'One Africa' strategy, which Barclays PLC announced last year. We have already consolidated the regional offices for Absa Africa and Barclays Africa, as well as introduced a global product strategy for banking across the continent.

This proposed combination of the businesses will mirror the managerial and operational structure we have already put in place,' chief executive of Absa Group and Barclays Africa said. Barclays is also currently trying to enter the Namibian market through negotiations with Capricorn Investments Holdings (CIH), the holding company of Bank Windhoek, to buy 49,9 per cent of the shares in the Namibian bank. _CIH is also the majority shareholder in Bank Gaborone

Barclays Plc bought 55 percent of Absa for $4.5 billion (P33.75bn) in 2005 as part of an expansion strategy into emerging markets, but the shareholding is now likely to increase if the deal is struck.Absa is one of South Africa's largest financial services groups involved in banking, insurance and wealth management. Its operations extend to Tanzania, Mozambique, Namibia, Nigeria and Botswana.

In Botswana, the South African bank opened its insurance business, Absa Life in 2011.