Barclays And Absa Group Plan To Create Single African Bank

Tom Burroughes

21 August 2012

Africa’s Absa Group, a subsidiary of UK-listed Barclays, are combining African operations into a single organisation, tapping what is expected to be strong growth across parts of the continent.

The agreement will combine Barclays’ interests in Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and the Indian Ocean with Absa. Barclays Bank remains as the majority shareholder of the combined African operations, the firms said in a statement today.

A spokesperson for Barclays’ wealth and investment management arm told WealthBriefing that there should be no impact on wealth management clients from the agreement.

The stock market listings of Barclays’ subsidiaries in Kenya, on the Nairobi Securities Exchange, and in Botswana, on the Botswana Stock Exchange, will remain.

The combination is subject to approval by Barclays’ and Absa’s boards, as well as the approval of regulators.

“There can be no certainty that these discussions will lead to a combination. The proposed combination would not be expected to be completed until 2013,” the statement said.

“This proposed combination of the majority of the Barclays Africa businesses with Absa is the next logical step in delivering our `One Africa’ strategy, which Barclays PLC announced last year. We have already consolidated the regional offices for Absa Africa and Barclays Africa, as well as introduced a global product strategy for banking across the continent. This proposed combination of the businesses will mirror the managerial and operational structure we have already put in place,” Maria Ramos, chief executive of Absa Group and Barclays Africa, said in a statement.

Barclays purchased 54 per cent of Absa in 2005 for $4.5 billion to expand in emerging markets.

The news will hopefully be a fillip to Barclays as it seeks to restore its reputation following the resignation in July of CEO Bob Diamond amid the LIBOR-rigging scandal.