May 31, 2017

Barclays sells half its shares in African arm

Barclays is selling almost half its shares in its African operations to institutional investors in a deal to raise about £1.5bn and cut the stake in its Johannesburg-listed offshoot well below 50 per cent. The sale is a key part of Barclays' plan to build its core capital level, which at 12.4 per cent is lower than many of its rivals, while shrinking the bank's geographic presence back to its main markets of the UK and US. Barclays said that Wednesday's sale, which went ahead after the South African Treasury agreed to its stake falling below 50 per cent, "Further progresses Barclays' intentions" to deconsolidate the African group from its accounts. Barclays, which has given itself until 2019 to complete the African selldown, said it aimed to reduce its BAGL stake further to "Around 15 per cent". Accountants have advised Barclays that it will only receive the full benefit of offloading the African business by deconsolidating it from its accounts once its stake falls below 15 per cent, according to a person briefed on the matter. Barclays this year agreed to pay nearly $1bn to Barclays Africa as part of a divorce agreement that had to be approved by South African regulators before it could cut its stake below 50 per cent.

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