Rhys Jones
BARCLAYS is in talks about combining its African operations with that of majority- owned subsidiary Absa Group in a move aimed at accelerating expansion on the continent, the British bank said yesterday.
Barclays and Absa, which is South Africa's third-largest bank and its biggest retail lender, had already agreed to combine strategies in Africa and had set up a joint team of executives to lead expansion.
This takes forward the "One Africa" strategy announced last year by former Barclays CEO Bob Diamond who resigned over the Libor manipulation scandal.
"This proposed combination of the businesses will mirror the managerial and operational structure we have already put in place. It will provide a platform for further growth," chief executive of Absa Group and Barclays Africa Maria Ramos said.
It was "the next logical step in delivering our One Africa strategy", Ramos said.
She recruited seasoned banker Kennedy Bungane from Standard Bank to manage the One Africa strategy. Bungane joined Absa in May.
Barclays said combining the businesses would help increase growth opportunities in Africa, where Absa has been slow to capitalise on Barclays' wide presence on the continent, trailing fast-moving rival Standard Bank.
Absa, in which Barclays holds a 56% stake, issued a profit warning in June, sending its shares into a tailspin and igniting fears that its recent recovery was losing steam.
"The Africa business is an important long-term growth driver for the business," Oriel Securities analyst Mike Trippitt said.
He estimates Barclays' African loan book will grow by an average 9% per annum between 2011 and 2015 compared with 5% for the group.
Shares in Barclays were up 2.5% to 195.7 pence yesterday morning, compared with a 1.1% rise in Europe's bank index.
The proposal would see Barclays combining its interests in Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and the Indian Ocean with Absa, and remaining the majority shareholder of the combined African operations. – Reuters.
