British banking giant Barclays Plc finally confirmed its planned exit from the African market on Tuesday, even as the local unit of the British lender gave guarantees to its customers “it is here to stay”.
Barclays chief executive Jes Staley rested months of speculation, saying the lender would sell its 62.3 per cent interest in the African business, Barclays Africa Group Ltd (BAGL), over the coming two to three years.
“As part of the simplification of the group, we have decided, subject to required shareholder and regulatory approval, to reduce our interest in Barclays Africa to a non-controlling, non-consolidated position over the next 2-3 years,” he said.
And speaking in Nairobi, Barclays Bank of Kenya (BBK) Managing Director Jeremy Awori sought to reassure customers that the move would not affect the local operations.
“I would like to make it clear that any decisions concerning the operations of Barclays Kenya can only be made by Barclays Africa Group in consultation with other investors who are shareholders in this business.
Consequently, the announcement does not impact the shareholding and ownership of Barclays Bank of Kenya and will not have any impact on the day to day running of our business, or on our customers, clients and colleagues in Kenya,” said Mr Awori.
Mr Awori said at a press conference that the decision by its parent owner to leave Africa, was driven “entirely by the regulatory pressures Barclays PLC faces,” including the level of capital it is required to hold in respect of its shareholding in Barclays Africa and that it was not a commentary on the quality of the Africa business or its strategic direction.
“Barclays Bank of Kenya is a profitable institution currently in its 100th year of operation in this country. As an institution, Barclays Bank of Kenya has, in the past century, evolved through different transitions and remained a strong business of high repute,” said Mr Awori.
Barclays PLC owns 62.3 per cent of Barclays Africa Group, which in turn holds a controlling stake of 68.5 per cent of Barclays Bank of Kenya and stakes in 11 other operations in Africa.
Barclays Africa Group Ltd chief executive Maria Ramos turned to the lenders’ African business growth as a pointer to jittery Kenyan customers on the strength of the local unit and its sustainability.
The announcements came as Barclays Plc revealed annual losses after tax of Sh55 billion ($549 million), for the bank as a whole. Earlier, Mr Staley disclosed the British lender plans to split the company in two to form Barclays UK as well as Barclays Corporate and International.