Barclays PLC, based in London, announced on 1 March 2016 that it would reduce its ownership of its African business (called Barclays Africa) from 62.3% to a minority shareholding over time. Global bank regulations tightened after the 2008 world financial crisis, making it less profitable for international banks like Barclays to own substantial businesses abroad.
The shareholding reduction will not change Barclays Africa’s position as one of the continent’s largest banks, serving more than 12 million customers through our operations in 10 countries in Africa, where some of our largest markets are in South Africa, Kenya, Zambia, Botswana, Tanzania and Ghana.
Our business is an amalgamation of many banks - including African and British banks - over the past century. Our roots can be traced back to the late 1800s with the establishment of the Johannesburg Building Society. We are financially independent from Barclays PLC and we continue to invest in Africa, where we see significant growth prospects.
Our shareholding and our name may change over time but we are the same bank. Our commitment to the continent is stronger than ever. Our destiny is Africa.
Ten key questions:
1. Why is Barclays selling?
After the global financial crisis in 2008, regulators introduced new rules which have had far-reaching effects on banks. One of the consequences was that it became less profitable for global banks such as Barclays to own large businesses abroad.
Barclays PLC carries 100% of the financial responsibility for Barclays Africa, but received only 62% of the benefits.
2. Will the brand change?
The business that is known as Barclays Africa today has deep roots in Africa. In Kenya, for example, Barclays has been a household brand for more than 100 years.
We may have to change our brand over time, but we will not take this decision lightly. It would take some time and we will inform you well in advance.
3. Will you keep your operations in the various countries in Africa?
Barclays Africa owns businesses in 10 markets in Africa and we are not selling any of those as a result of the ownership change between Barclays PLC and Barclays Africa.
Barclays PLC owns part of Barclays Africa. Barclays Africa, in turn, owns businesses in 10 countries, including Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda, Zambia and South Africa, where we are known as Absa. We also have representative offices in Namibia and Nigeria.
4. How does Barclays leaving affect customers and partners?
Like most large companies that have been in business for more than a century, we have had several shareholder changes over that time.
As has been the case during most shareholder changes, for the most part, it will be business as usual for our customers and partners. We will let you know well in advance if there are any changes.
5. Who are the new owners?
Barclays PLC is selling some of its shares in Barclays Africa in several transactions. In the first transaction, conducted in May 2016, 12.2% of its shares were sold to a number of well-known fund managers, including South Africa’s Public Investment Commission (PIC), which manages government employees’ pension money.
As of June 2016, Barclays PLC owned 50.1% of our company. The second-largest shareholder was the PIC, followed by Stanlib Asset Management, Old Mutual Asset Management and Investec Asset Management.
We will know who the final shareholders are when Barclays PLC completes its shareholding reduction programme. Barclays PLC said in March 2016 that it would reduce its shareholding over a period of two to three years.
6. What role do regulators play in the process?
Bank regulators in the UK and in Africa, including the South African Reserve Bank, have several requirements that we must meet to ensure that there are no disruptions to the markets in which we operate.
Barclays PLC and Barclays Africa are working together to ensure that the process is undertaken in an orderly way.
7. Is my money safe?
Our customers can be just as confident doing business with us today as they have always been.
We are financially independent from the global Barclays group and always have been.
We remain a well-capitalised, profitable bank, regulated by the South African Reserve Bank and by the regulators in each of the countries in which we operate.
8. Is Barclays Africa dependent on the global Barclays group for funding?
No. Barclays Africa is not reliant on the global Barclays group for funding, capital or liquidity.
Barclays Africa is independently listed on the Johannesburg Stock Exchange. We have a strong balance sheet of over R1 trillion and are well capitalised.
9. Is Barclays Africa going anywhere?
Certainly not. We continue to invest and grow in Africa where we make a significant economic contribution. In the 2015 financial year, Barclays Africa:
Paid R8.6bn in dividends to shareholders
Contributed R7.3bn in taxes
Paid R20.9bn in salaries to 41 772 employees, investing R2.3bn in training and development
Serve 12.3m customers and clients, providing over R703bn in gross loans and advances, safeguarding R688bn in deposits and managing more than R276bn of assets on behalf of our customers and clients
Spent R14.6bn on procurement
Invested R192m in community programmes and 11 284 employees volunteered 66 709 hours
Reached 25 966 SMEs through a series of seminars, conferences and workshops
(source: Barclays Africa 2015 Integrated Report)
10. How are Barclays in Egypt and Zimbabwe affected?
Barclays Africa does not own the Egypt and Zimbabwe operations. Barclays PLC owns Barclays in Egypt and Zimbabwe. In March 2016, Barclays PLC announced that it would sell the Egypt and Zimbabwe operations and subsequently announced in October 2016 that Barclays in Egypt would be sold to Attijariwafa Bank.