Global banking group Barclays has announced that it will be\u00a0selling down its stake in Barclays Africa Group Limited – trading as Absa in South Africa – in its financial report for the full year to December 2015.<\/p>\n
In its report<\/a>, the group stated its intention to sell down its stake in Barclays Africa “to a level which permits accounting and regulatory deconsolidation” over the next two to three years.<\/p>\n The group said it will have a\u00a0“non-controlling\u00a0investment” in the group over time.<\/p>\n Barclays said it will be focusing its business on two core\u00a0divisions \u2013 Barclays UK and Barclays Corporate & International\u00a0– as part of a new strategy.<\/p>\n The group also noted that Barclays Africa is a big risk for the company, as it has little control over Barclays Africa’s liquidity risks.<\/p>\n “Barclays Africa\u00a0is a well-diversified business and a high quality franchise. However, the stake in (the company)\u00a0presents specific challenges to Barclays as owners,” Barclays said.<\/p>\n “While Barclays has a comprehensive framework for managing the group\u2019s liquidity risk, liquidity risk is managed separately at Barclays Africa due to local currency and funding requirements.”<\/p>\n Barclays is the majority stakeholder in Barclays Africa – which trades as Absa in South Africa – with a 62.3% stake in the group. The group did not say how much of its\u00a0stake it would be letting go of.<\/p>\n Barclays Africa operates across 12 countries in Africa and employs 45,000 people in over 1,260 branches.<\/p>\n The move to pull out of the African business comes as no surprise, as it was speculated in late 2015. It was pulled back into focus in mid-January, when the Wall Street Journal reported that new Barclays CEO, Jes Staley would be pulling back operations in weak markets.<\/p>\n This was followed by reports from the Financial Times citing sources that claimed that Barclays no longer saw Barclays Africa as core to its strategy.<\/p>\n At this stage it is unclear who will be buying up Barclays’ stake in the African business, but the Public Investment Corporation of South Africa has expressed interest in increasing its stake in the group.<\/p>\n Earlier on Tuesday, Absa reported growth in full year profits, which were up 10% to R14.3 billion from R13.0 billion in its financial results ended 31 December 2015.<\/p>\n Revenue grew 6% to R67.2 billion, as net interest income increased 8% and non-interest income rose 5%, while operating expenses grew 5% to R37.7 billion, it said.<\/p>\n However, the group said that tough conditions in South Africa hampered its growth in the region.<\/p>\n Absa shares tumble amid sale reports<\/a><\/strong><\/p>\n Absa responds to Barclays sale reports<\/a><\/strong><\/p>\n Barclays to announce Absa sale: report<\/a><\/strong><\/p>\nMore on Absa and Barclays<\/h3>\n