Barclays Heads Out of Africa -- Update
June 01 2017 - 4:49AM
Dow Jones News
By Max Colchester and Ian Walker
LONDON-- Barclays PLC said Thursday it completed the planned
sell-down of its African business, reducing its stake in the unit
to 15%.
The U.K. bank said it raised GBP2.22 billion ($2.85 billion)
from the sale of Barclays Africa Group Ltd. shares after it shed
more of its stake than initially expected due to strong investor
demand.
In 2016, Barclays Chief Executive Jes Staley pledged to end the
bank's century-long presence in Africa to drum up funds that could
be redeployed to other parts of its business. It spent the past few
months locked in negotiations with regulators to get the signoff to
exit from the African business.
The sale should help alleviate capital fears around Barclays,
which still needs to pay GBP800 million to split the African
business out of its franchise. The deal will add 27 basis points to
Barclays's capital ratio, a key measure of balance sheet strength,
which at stood at 12.5% in March 2017.
Mr. Staley decided to shed Barclays' 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.
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.
Barclays is expected to announce at the end of this 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.
The overnight sale of saw Barclays cuts its stake in Barclays
Africa from 50.1% to 15%. The bank intends to hold on to the
remaining shares in the unit.
Write to Max Colchester at max.colchester@wsj.com and Ian Walker
at ian.walker@wsj.com
(END) Dow Jones Newswires
June 01, 2017 04:34 ET (08:34 GMT)
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