Barclays Heads Out of Africa
May 31 2017 - 12:29PM
Dow Jones News
By Max Colchester
Barclays PLC said Wednesday it will sell a large of chunk of its
African unit after regulators signed off on the long-awaited
deal.
Barclays said it would cut its stake in Barclays Africa Group
Ltd. to around 28% from 50.1% currently. The share sale is expected
to generate GBP1.6 billion, which should ease capital concerns
swirling around the lender. The South African pension fund Public
Investment Corporation SOC Limited will be an anchor investor in
the sale which is currently under way, the bank said.
Back in 2016, Barclays Chief Executive Jes Staley pledged to end
Barclays's century-long presence in Africa to drum up funds that
could be redeployed to other parts of the franchise. The bank spent
the past few months locked in negotiations with regulators to get
the signoff to shed part of its African stake. The bank on
Wednesday said it was now targeting holding a 15% stake in Barclays
Africa.
The sale offers some reprieve for Mr. Staley, who is being
probed by U.K. regulators over his attempts to silence a Barclays's
whistleblower. Barclays is expected to announce next month that it
will close its "noncore" division, which houses the bank's unwanted
assets, a move which the U.S. executive says shows that the
turnaround at Barclays is nearly complete.
Mr. Staley decided to shed Barclays's African business in part
because regulators make the large bank hold extra capital against
the unit. A smaller, less-risky bank wouldn't have to do this.
Barclays also estimates that a U.K. tax on bank balance sheets
means it would pay an extra GBP200 million in levies by 2021 to
keep its African unit on its books.
Once Barclays is a minority owner of Barclays Africa it can
deconsolidate the unit from its accounts and get regulatory
clearance not to hold capital against it.
Outside its 12-country Africa unit, Barclays also owned a lender
in Egypt, which it sold. It still controls a Zimbabwean bank.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
May 31, 2017 12:14 ET (16:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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