Barclays Kenya is not shutting down – MD Awori

February 29, 2016 10:20 am
Barclays Kenya is not shutting down, declared MD Jeremy Awori on Monday. Photo/ FILE
Barclays Kenya is not shutting down, declared MD Jeremy Awori on Monday. Photo/ FILE

, NAIROBI, Kenya, Feb 29 – Barclays Africa Group Limited says it remains committed to Africa despite the announcement by its majority shareholder – Barclays PLC – of plans to exit Africa operations.

According to the Financial Times, Barclays PLC has decided to exit its African operations in order to refocus the bank on its core United Kingdom and United States markets.

The bank has appointed a subcommittee to study how and when to sell its 62.3 percent stake in Barclays Africa, which is valued at Sh492 billion and attributed the reason for the exit as; Africa becoming a costly distraction owing to the devaluation of the South African Rand, and extra risks of corruption and misconduct in Africa which would tarnish the entire African operation if something was to go wrong.

READ: Barclays considering Africa exit

Barclays Africa Group Chief Executive Officer Maria Ramos says the bank will continue to offer a full and integrated range of products and services to more than 12 million customers in 12 countries across Africa urging customers to be confident in doing business with them.

“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,” Ramos says.

Barclays Africa Group registered head office is in Johannesburg, South Africa and has majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia.

The Bank also has representative offices in Namibia and Nigeria. Barclays Bank PLC has operations in Egypt and Zimbabwe which are an integral part of Barclays Africa business and continue to be run by Barclays Africa operationally.

“We continue to be optimistic about our prospects in Africa, where we have a strong franchise with assets of over R1 trillion. We are deeply committed to the success of our continent. Our destiny is in Africa,” Ramos added.

Barclays PLC is will update the market on the shareholding in Barclays Africa Group Limited at the time of its 2015 full-year results announcement on March 1, 2016.

“Barclays Bank of Kenya is not shutting down. I reiterate, Barclays Bank of Kenya is not shutting down and there are no plans at Local, Regional or Group level to shut down our operations here any decisions concerning the operations of Barclays Kenya can only be made by Barclays Africa Group Limited in consultation with other investors who are shareholders in this business,” said Barclays Kenya Chief Executive Jeremy Awori.

According to Cytonn Investments Chief Executive Edwin Dande, if the divesture comes to pass, the minority shareholders are likely to get a new partner and this might be a big blow to the Kenyan business given the huge brand equity the bank has.

The move Dande says, will increase the strength of other Tier I banks, namely Equity and KCB, which over time have displaced foreign banks such as Standard Chartered, Barclays and Citi from their perch as the key provider of banking solutions.

“Five years ago, Barclay’s market capitalisation was Sh93.7billion and today it is Sh70.3billion, a decrease of 24.9 percent, compared to a local bank such as Equity whose market capitalisation was Sh105.5 billion and is now Sh144.3 billion, an increase of 36.8 percent.”

“It is becoming harder for foreign banks to grow and compete locally given the rapidly evolving landscape with the likes of M-PESA, agency and informal sector banking, innovations that were adopted faster by local banks compared to foreign banks,” he explained.

He points out that the move also highlights the increased need for African countries to tackle corruption and misconduct in Africa.

“Global banks and brands such as Barclays have been at the forefront of instilling structures for governance and frameworks, and their impending exit over corruption is a blow to the African Continent. While banking in Africa is attractive, and the opportunity vast, the stricter regulatory regimes in developed markets make the African banking business too risky for global banks,” he concludes.


You may also like...

Latest Articles

Most Viewed