Barclays Bank Finally Embarks on Offloading Its Business in Africa

Fredrick Ngugi May 05, 2016
Sacked Barclays Bank employees in Kenya Sue the Bank for exiting Kenya. Photo (

Barclays Bank Public Investment Corporation has announced its plans to begin offloading its investment in Africa by selling 12 percent of its shares to South Africa’s state pension fund.

In a statement sent to media houses yesterday, Barclays announced that it will be selling 103.6 million shares in Barclays Africa Group, with 10.3 million of the shares going to South Africa’s state pension fund, representing 1.2 percent of Barclays Africa Group.

“This is an important first step as we seek to reduce our shareholding in Barclays Africa to a level that achieves accounting and regulatory deconsolidation,” Barclays’ Chief Executive Jes Staley said in the statement.

In February this year, the British bank announced its intentions to quit its African operations in a brave move to refocus on its core markets, the UK and US.

The bank said a review of the African business by its board, which was led by its new CEO Jes Staley, revealed a number of reasons why it would be strategically sensible for it to exit the African market.

Local Banks Set to Benefit

Although Barclays Africa Group has insisted that it’s not shutting down, the sudden reports of the impending exit by Barclays PIC have already caused a wave of shock among Barclays’ customers who now contemplate moving to other local banks.

It is therefore likely that local banks in countries where Barclays Africa Group has been operating would expand their customer base from the expected spill over.

Local investors such as South Africa’s state pension fund are set to benefit from the divestment also as Barclays Bank PIC has already declared its intention to relinquish its shares to local investors.

The exit is also seen as an opportunity for the local unit (Barclays Africa Group) to create a more customer-friendly environment by attracting investors who have a better understanding of the African market.

The Possible Downside

Although Barclays Africa Group insists that the exit by Barclays PIC – its majority shareholder for 100 years – won’t have a major impact on its operations, many economists envisage an uneasy future for the bank.

The exit also portrays Africa’s economy in a bad light, which is likely to drive away foreign investors. According to Barclays PIC, one of the main reasons for its exit is the continued depreciation of many African currencies.

This development has created fears among investors that African economies aren’t ready for retail banking, further diminishing chances for Africa to grow.

Since South Africa’s Public Investment Corporation – the country’s largest pension fund – may not have the capacity to raise the needed $4 billion to buy Barclays Bank, more investors are expected to join in, which leaves depositors worried about what is likely to happen to their money.

Many Barclays bank employees in Africa are worried that they might lose their jobs once the new investor takes over.


Last Edited by:Deidre Gantt Updated: June 19, 2018


Must Read

Connect with us

Join our Mailing List to Receive Updates