Barclays PLC has submitted an application to the South African Reserve Bank for approval to reduce its stake in Barclays Africa to below 50%. The application will require the approval of South Africa’s Minister of Finance.
Already Barclays PLC has agreed to pay £765 million to Barclays Africa for it to split from the African business. The amount is expected to be channeled into technology, rebranding, separation related expenses among others. £27.5 million out of a total of £55 million to cover separation related expenses was paid by Barclays PLC in December 2016.
“Before it can sell down any further, Barclays PLC needs to get regulatory approval…as to who the buyers are likely to be, the company has to be approved first before any further decision can be made on whether that could be obtained through the book building exercises or any other mechanism,” CEO for Barclays Africa, Maria Ramos said recently. She further added that Barclays should be able to build the leading Pan African financial institution it aims at upon the separation.
“Separation gives us the opportunity to unlock the potential to do things differently and build energy and momentum for our future as a pan-African organization.”
Barclays Africa in a statement also revealed that its headline earnings increased 5% to R14.9 billion, with South Africa up 2% to R12.2bn and rest of Africa up 17% to R2.8bn. Also the group’s revenue grew 8% to R32.4 billion. However, its impairments increased by 26% resulting in a credit loss ratio of 1.08% from 0.92%.
Among the support that Barclays PLC offers to its African business group include technology, branding, human resources, credit risk management, strategic development and operational management support.