Feb 22, 2017
Barclays seals divorce agreement with African subsidiary
Barclays has reached agreement with its African subsidiary about the details of their divorce, a key step before the British bank can sell more shares in its Johannesburg-listed offshoot. Two people briefed on the matter said Barclays and its South African subsidiary were awaiting approval for the agreement from local regulators. To break the master services agreement that governs the provision of these services, Barclays is expected to pay a fee to its African subsidiary, in which its stake is worth R68bn. While its main South African retail bank operates under the ABSA brand, BAGL uses the Barclays brand in about 10 other countries, including Kenya, Ghana, Tanzania, Zambia, and Botswana. Extrapolating from the £210m of upfront costs for Lloyds Banking Group to spin-off its TSB unit in 2014, Mr Costello estimated Barclays could face separation costs of between £500m and £1bn. In a circular to shareholders before last year's annual meeting, Barclays said it would "Need to co-operate with Barclays Africa to facilitate an orderly transition of the operational support and other services, including brand licensing and information technology support services".
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