Barclays packing out of Africa

After being one of the few western banks to establish a presence in sub-Saharan Africa, Barclays is planning a retreat.

It is preparing to sell some of its 62 per cent stake in Barclays Africa, one of the continent’s largest banks, employing about 44,000 people with 1,267 branches, as Jes Staley, Barclays’ new chief executive, refocuses on a narrower range of business, according to The Wall Street Journal.

Barclays’ African banking unit generated £791 million of pre-tax profits in the first nine months of last year, 15 per cent of the bank’s total.

However, a collapse in commodities prices and political instability have sent the value of the rand, the South African currency, plummeting, losing more than a quarter of its value against the US dollar in the past six months. Most of Barclays’ African banking is carried out in South Africa.

The decision is a symbolic reversal for Barclays. The bank built up its African banking network over nearly a century, making it one of the leading western banks, along with Standard Chartered and Citigroup, operating on the continent.

Finding an outright buyer for Barclays’ African business is unlikely, analysts said. The commodities price crash and China’s economic slowdown have dulled appetite for emerging markets assets.

Outside its 12-country Africa unit, Barclays also controls a bank in Egypt, which is profitable and could attract bidders from the Middle East, analysts added.

The Times/OTCEER