Jun 1, 2017

Barclays cuts stake in African operations further than expected

Barclays has brought the curtain down on more than a century of African operations by selling a bigger chunk of its business in the continent than expected, which will boost capital while generating a £1.2bn loss. Citing strong demand from institutional investors, Barclays said on Thursday it had sold a 33.7 per cent stake in its Johannesburg-listed offshoot, increasing by half the size of the planned share offering it had outlined a few hours earlier. After the planned contribution of about 10 per cent of Barclays' remaining shares to a South African black empowerment scheme, the bank said its stake in its African business would fall from 50 per cent to just below 15 per cent. Barclays said the sale of shares in Barclays Africa Group Limited at R132 per share, raised £2.2bn and would allow it to deconsolidate its African business from its accounts. Barclays this year agreed to pay about £800m to Barclays Africa as part of a three-year 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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