Barclays accelerates Africa strategy

Barclays bank and its subsidiary Absa Group have agreed to combine the majority of Barclays Africa operations with Absa.

Barclays bank and its subsidiary Absa Group have agreed to combine the majority of Barclays Africa operations with Absa.

The banking giant hopes that the plan will position it as the "go-to bank" on the continent and is expected to bolster plans to expand corporate banking, market activities and bancassurance in Africa.

The combined business is set to create a pan-African financial services business and a platform for further growth. When completed, the JSE-listed business is expected to serve approximately 14.4m customers through a network of more than 1,300 outlets and over 10,400 ATMs.

The proposed strategic combination, expected to complete in the first half of 2013, will be effected by way of an acquisition by Absa Group of Barclays Africa, the proposed holding company of the portfolio, for a consideration of 129.5m Absa ordinary shares, representing a value of R18,33bn (£1.3bn) for Barclays Africa.

It follows on from steps taken by Absa and Barclays in 2011 to integrate their African businesses from an operational and management point of view. This involved consolidating the regional offices for Absa Africa and Barclays Africa in Johannesburg and establishing a combined Africa management oversight team, as well as introducing a global product strategy across the continent.

Commenting on the rationale for the transaction, Antony Jenkins, Chief Executive Officer of Barclays, said: "This transaction will give us a platform from which we can further grow our Africa business to the benefit of customers, colleagues, shareholders and the communities in which we operate."

Maria Ramos, Chief Executive Officer of Absa Group and Barclays Africa, added: "This is a compelling and unique opportunity for us to further our 'One Bank in Africa' ambitions by combining with a leading sub-Saharan African banking franchise. We are tremendously excited by the opportunities for growth across the continent and the geographically diversified earnings potential that a combined business would deliver."

Barclays share price was up 1.34% to 249.70p at 08:52 on Thursday.

MF

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020