Capital Markets

Barclays Plc attracts over 100 bids for its African unit sale


From left: Barclays Africa chief executive for retail and business banking Roy Ross, Mr Nishidh Shah, a customer, and Mr Zahid Mustafa, the Barclays Kenya retail and business banking director, during the opening of the bank’s Kitengela branch. PHOTO | COURTESY

Barclays Plc recently received more than a 100 bids when it sought to sell a 12.2 per cent stake in Barclays Africa Group Limited (BAGL) that owns Barclays Kenya, David Hodnett, a deputy CEO at the unit said in an interview.

Speaking to the Business Daily in Nairobi last week, Mr Hodnett said the banking group considered the magnitude of interest shown in the stake held by Barclays Plc as an indication that BAGL had great value.

Barclays Plc has put on sale its 62.3 per cent stake in BAGL for the next two to three years. Having sold about 12.2 per cent to South Africa’s Public Investment Corp SOC Ltd there is now slightly over 50 per cent that is still to be sold.

READ: Barclays Africa chiefs to discuss sale of stake with CBK governor

“Barclays Plc got over 100 bids for the 12.2 per cent shareholding that was sold to the South African pension fund. With so many bids, I can say that it is a good sign and starting point. We are excited by the speculation on the sale and those who are interested,” said Mr Hodnett.

Questions have arisen as to why the UK firm would want to sell its shareholding in its Africa unit when it has one of the highest returns to equity from the regions it operates.

READ: Barclays Africa to negotiate for name after parent’s exit

Mr Hodnett said that Barclays Plc, the majority shareholder, was selling in order to comply with the recent stringent legal requirements in the UK where the company was to pay more levies and meet increased capital adequacy levels.

Barclays Plc announced in March that it was out to sell the 62.3 per cent stake in BAGL, which in turn holds shares in Barclays’ subsidiaries around Africa including 68.5 per cent in Barclays Kenya. BAGL is listed on the Johannesburg Stock Exchange.

Mr Hodnett said while Barclays Plc is selling its stake, BAGL was looking to extend its footprint in Africa with an upgrading set for the company’s Nigerian representative office into a full branch.

“Our strategy as Barclays Africa is to increase our footprint in Africa and open a full-fledged branch in Nigeria. We are applying for a banking licence there,” said Mr Hodnett.

On whether technology would lead to loss of jobs, he said the company’s focus is on efficiency, noting that more tasks are now being performed using robotics. He however did not say directly whether there would be any loss of jobs in the group going into the future.