Barclays Bank eyes deal making and insurance market
Barclays’ reorganisation plan dubbed “One Africa”’ will be completed next year. It involves the merger of Barclays’ Africa operations with those of its South African subsidiary Absa Bank. Photo/File
What you need to know:
Barclays is seeking to adopt the financial supermarket status, which spans from arranging corporate deals, selling insurance products, and offering loans.
Barclays Africa announced Thursday that its continental operations would increasingly focus on corporate banking and bancassurance.
Barclays Plc is expected to merge operations in Ghana, Kenya, Botswana, Zambia, Uganda, and Tanzania with Absa into an Africa unit.
The consolidation is aimed at creating seamless operations and synergies between Barclays and Absa in Africa.
Barclays Bank is set to widen its business to include investment banking and insurance services following the consolidation of the African operations held by its parent company under South Africa’s Absa Group.
The bank—which has a heavy presence in corporate and retail lending—is seeking to adopt the financial supermarket status, which spans from arranging corporate deals, selling insurance products, and offering loans.
Barclays Africa announced Thursday that its continental operations would increasingly focus on corporate banking and bancassurance — where the bank sells insurance products through its banking halls.
This followed information that South Africa’s Absa would take control of Barclays PLC’s Africa’s operations including its 68.5 per cent stake in the Kenyan unit in a share swap deal that would increased the UK’s lender’s stake in the South African unit to 62.3 per cent from the current 55.5 per cent.
Barclays Bank executives in Nairobi said that the consolidation of Barclays’ Africa operations with that of its South African subsidiary Absa Bank would usher in new products that would change the face of the Kenyan unit.
“The consolidation offers opportunities for Barclays in Kenya to go big in offering new products like investment banking, bancassurance, and project finance,” Yusuf Omari, the chief financial officer at BBK told the Business Daily in a phone interview Thursday.
Integrated financial services models are increasingly taking route in Kenya, with banks leading the way in adopting the financial supermarket strategy for growth. Equity Bank, NIC Bank, Co-operative Bank, Standard Chartered, and CfC Stanbic are fronting the model.
The rejuvenated Barclays will intensify competition for market share among top tier banks like StanChart and CfC Stanbic — which is majority owned by South Africa’s Standard Bank that will go head to head with Absa for control of Africa’s financial services market.
Barclays’ reorganisation plan dubbed “One Africa”’ will be completed next year. It involves the merger of Barclays’ Africa operations with those of its South African subsidiary Absa Bank.
Barclays acquired a 55.5 per cent stake in South Africa’s third-largest bank in 2005 but the two have remained separate entities outside South Africa, with Tanzania running parallel operations in the same country.
Merge operations
Barclays Plc is expected to merge operations in Ghana, Kenya, Botswana, Zambia, Uganda, and Tanzania with Absa into an Africa unit. The shareholding of the Kenyan unit will be held by Barclays Africa Limited —which will be owned fully by the South African bank.
The consolidation is aimed at creating seamless operations and synergies between Barclays and Absa in Africa.
With a bigger capital base under Absa, the Kenyan unit will have a chance to arrange big-ticket lending and infrastructure financing.
Already, the bank has reorganised its Nairobi executive suite with the appointment of Jeremy Awori, 42, as MD following the promotion of Adan Mohamed to the lender’s Africa office as chief administrative officer.
Mr Awori is current the chief executive of Standard Chartered Tanzania and will join BBK in February.
The changes come in a year that has seen the lender record the slowest profit growth among top banks in the nine months to September, making it the fourth profitable lender from the top position in 2010.
