Barclays Africa Group gives update on share sale

Author: Jessica Acheampong
Ms Mario Ramos - Chief Executive of Barclays Africa Group Limited
Ms Mario Ramos - Chief Executive of Barclays Africa Group Limited

The Chief Executive of Barclays Africa Group Limited, Ms Mario Ramos has assured  the Barclays Group is working closely  with Barclays Plc to ensure that the latter’s exit from Africawould not erode value for its shareholders. 

She said the move to offload the 62.3 per cent stake in the Barclays Africa Group was an ongoing process and the two parties were progressing in right direction.

Speaking via a conference call to announce the half-year results of the group from South Africa, she said, the first sale tranche of 12.2 per cent was successfully offloaded on May 5, and this reduced Barclays PLC’s shareholding to 50.1 per cent in the Africa Group.

“Barclays Africa Group continues to work with Barclays PLC, including planning for the operational separation of the two businesses in order to preserve value for all stakeholders,” she said.

She added “Barclays Africa Group and Barclays PLC continue to engage with regulators as the divestment process is subject to all relevant regulatory approvals. Shareholders will be updated in due course.”

She said following the announcement on March 1, 2016 of the imminent sale of its stake,  Barclays Plc had been following  capital market options to reduce its shareholding in Barclays Africa Group to achieve regulatory deconsolidation. 

Barclays Plc has 62.3 per cent stake in Barclays Africa Group which is intends to offload within the net two to three years

Africa still resilient

Revenue from the banks operations in the rest of Africa increased to 23 per cent of total revenue.

She said Barclays also maintained the top 3 status by revenue in four of the five largest markets, which are South Africa, Ghana, Zambia and Botswana. 

“Cost-to-income ratio improved to 53.4 per cent from 55.9 per cent, showing good progression towards the medium-term target of the low 50s. Return on Equity (RoE) of 16.1 per cent which is marginally down over the prior year in line with our guidance, and remains short of the medium-term target of 18 to 20 per cent,” she said. 

Despite the bright outlook, she said there were factors that posed significant downside risks to the banks operations in Africa going forward. 

“In South Africa, business confidence remains weak, and the combination of weak job growth, higher inflation and rising interest rates have placed a strain on consumer finances. GDP growth in South Africa is expected to continue to weaken in 2016 and recover slowly in 2017. Similarly, average GDP growth in the rest of Africa presence countries is expected to be the lowest since 2002,” she said.

Half-year results

The Barclays Africa Group Limited has posted strong half-year results despite the challenging economic conditions in the continent.

The results, according to Ms Ramos, demonstrate that the bank’s strategy continues to deliver and is resilient to the challenging economic environment as it continues to make progress on its commitments.

“Our strategy continues to deliver strong results and is proving resilient in a challenging economic environment. Ours is a proudly African bank deeply committed to Shared Growth across our continent,” she said. 

Headline earnings for the group increased by seven per cent to rand 7.25 billion from rand 6.755 million. Revenue also grew by 13 per cent to rand 36.5 billion as net interest income also increased 14 per cent.