Barclays Africa won’t break up — Dep. CEO
The Deputy Chief Executive of Barclays Africa Group, Mr David Hodnet, has assured clients that the bank will not break up in spite of the decision of Barclays Plc to offload its 62.3 per cent stake in the bank.
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He said the Barclays Africa Group was a listed entity on the Johannesburg Stock Exchange ((JSE), a move that puts the control and destiny of the bank in the hands of the Barclays Africa Group and not Barclays Plc.
Mr Hodnet, who was on a visit to Barclays Ghana, said this in an interview with the Daily Graphic, in Accra.
“The only decision Barclays Plc can make is to reduce or increase its stake in the Barclays Africa Group Limited; Barclays Africa is under the control of Barclays Africa Group and it will not be sold,” he said.
He said the bank would still operate in Africa and this would, therefore, require that it got a new investor on board.
He pointed out that the group was looking for a long- term investor and not an investor who would go and borrow to come and buy the shares.
“We are looking for investors who believe in the growth prospects of Africa and understand the African story,” he said.
The Deputy CEO also mentioned that there had been much interest expressed in the bank so far but indicated that the regulators would have to have a say in who the shareholders should be.
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“We will put together other arrangements with Barclays Plc and resolve all issues soon. We have put in place a contractual protection so there is nothing that is going to happen in a week or six months. We will have time to work through the optionality and what happens will depend on who the new investors will be,” he added.
Reason for Barclays PLC’s decision
He said Barclays Plc still believed in the growth prospects of Africa and it believed Barclays Africa would be part of that growth.
He said Barclays Africa was one of the largest regional banks on the continent with a strategy to be local in all the countries in which it operated.
“We are number three in Ghana, number two in Botswana, number three in Zambia, number four in Kenya and number three in South Africa. This shows the strength of the group,” he stated.
He said the group had a balance sheet of more than three trillion Rand and was, therefore, a very large entity which was very profitable with a lot of growth potential.
He said Barclays Plc was, therefore, reducing its shareholding in Barclays Africa due to recently introduced regulatory burdens specific and particular to Barclays PLC as a UK headquartered bank and globally significant financial institution.
He said those regulations significantly decreased Barclays Africa’s stand-alone returns for Barclays PLC, as it has to pay 62 million pounds additional taxes.
“Also, if you look at global banks around the world you will notice many of them are reducing their size and scale across the world and this is the case for Barclays Plc,” he explained.
Impact of decision
Mr Hodnet said the announcement had not affected its strategy and would not be shutting down.
He said the bank would, however, have to communicate a lot more than previously to make its clients understand the situation perfectly.
“We need to assure them that their monies are safe with us and that they should not be concerned about the operation of their accounts,” he said.