Absa shares tumble amid sale reports

Shares in Barclays Africa, formerly known as Absa Group, declined nearly 7% in morning trade on Monday amid rumours of a sale by its parent company, Barclays Group.

Bloomberg reported that Barclays Africa declined to an intraday worst level of 6.8% to R135.02 – its worst level since 11 January.

By noon however, shares in the local banking group were off 4.52%, or R6.54 at R138.29 on the Johannesburg Stock Exchange.

The JSE All Share Index was flat at 49,444 while the Banks Index was off 1.87%.

The Financial Times reported on Friday that Barclays would announce the sale of Barclays Africa on Tuesday (1 March).

Citing people familiar with the matter, FT reported that the group no longer sees Barclays Africa – known locally as Absa – as core to its strategy.

“Barclays does not own all of the equity, but it owns 100% of the risk if something goes wrong,” FT cited a source as saying.

Barclays’ stake is worth R78 billion (£3.5 billion) at current market prices. Investment bankers say there are no obvious strategic buyers at this stage, the FT said.

In a statement released on Monday, Barclays Africa said it remains committed to Africa, is optimistic about growth prospects, and expects to operate in the normal course of business.

UK-based Barclays PLC, which owns 62.3% of Barclays Africa, yesterday said it continues to evaluate its strategic options in relation to its shareholding in Barclays Africa Group and expects to update the market at the time of its 2015 full-year results announcement on 1 March.

Maria Ramos, Barclays Africa Group chief executive said: “We continue to offer a full and integrated range of products and services to more than 12 million customers in 12 countries across Africa and our customers can be just as confident doing business with us today as they have always been.

“With an independent board and a separate listing on the Johannesburg Stock Exchange we are deeply rooted in Africa and remain firmly in control of our future.”

Barclays and Barclays Africa Group will announce their 2015 financial results on Tuesday.

More on Absa

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Barclays to announce Absa sale: report

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Absa shares tumble amid sale reports