Barclays Africa to receive $1.1 billion after split from parent

Dar es Salaam/ Johannesburg. Barclays Africa Group Ltd (BAGL), which has two subsidiary banks in the country, is set to receive £765 million (about $1.1 billion) from its U.K. parent as the two entities separate amicably.

The money will be used in funding the investment required for BAGL in areas of technology, rebranding and other separation projects, the group’s chief executive officer, Ms Maria Ramos, said in Johannesburg yesterday.

The event was teleconferenced across various African countries where the bank has operations.

In Tanzania, BAGL owns Barclays Bank Tanzania. It also has a controlling stake in the National Bank of Commerce (NBC).

“Barclays Bank Africa has agreed terms for operational separation with the UK-based Barclays Group PLC, which is reducing its shareholding in Barclays Africa. The agreement is expected to unlock opportunities for Barclays Africa as an independent pan African bank…it is a good outcome that enables us to complete the separation, and to provide continuity and improved services for customers,” said Ms Ramos.

The UK-based Barclays PLC announced on March 1, 2016 that it intends to sell the majority of its shareholding in BAGL over a period of two to three years. According to to Ms Ramos, since then, the two entities have worked together to ensure the best outcome for all of the companies’ shareholders.

Barclays PLC has thus applied to the South African Reserve Bank for approval to have its shareholding in BAGL reduced to below 50 per cent.

Meanwhile, the BAGL has reported a splendid performance in 2016, with its headline earnings increasing by five per cent to reach 14.9 billion South African Rand.

The group’s pre-provision profit increased by 10 per cent to 32.4 billion South African Rand while revenues rose by eight per cent to 72.4 billion Rand.

The group attributes the performance to a sound various strategies that were aimed at stemming its losses since the group was created three years ago.

“The creation of Barclays Africa Group was a crucial strategic play. It created a platform for us to develop our businesses….It has given us a significant footprint across Africa. We set out with a vision to create a proudly pan-African bank and today, we can confidently say that we are delivering on this ambition,” said Ms Ramos.