Barclays Announces its Exit from African Operations
Barclays Africa shares immediately fell 6.9% to R126.61 in trade on Tuesday following the announcement.
This will be the British bank’s second divestment from South Africa in 30 years, when in 1986, due to crippling Apartheid policies, Barclays sold its shareholding and was renamed First National Bank of Southern Africa Limited.
The 2016 departure is due to their record low profit loss of 5.4bn pounds in 2015 ending 31 Dec. Barclays CEO Jes Staley said: “The weakening of the rand, (which dropped 25% against the dollar in 2015), has negatively impacted the value of Barclays’ investment. Particularly in the past six months.”
The Barclays plc exit is also due to a lack of appropriate suitors stepping up to take over the company’s services.
According to Business Day Live: “The (Barclays Africa Group) board notes that it is clear from this announcement that Barclays plc is reducing its shareholding in Barclays Africa due to recently introduced regulatory burdens specific and particular to Barclays plc as a UK-headquartered and globally significant financial institution,” it said.
“These regulations significantly decrease Barclays Africa’s standalone returns for Barclays plc.”
“We will now actively engage with Barclays plc and our regulators to ensure this process has an appropriate and satisfactory outcome for all our stakeholders.”