Barclays Bank’s interests outside of South Africa could be set to be sold to their former CEO Bob Diamond, according to a series of reports in the Western media.
Mr Diamond’s Atlas Mara financial services business is understood to have held preliminary talks with sovereign wealth funds in the Middle East and Asia about Barclays Africa interests although so far the company has not commented officially.
Industry experts have pointed out that there are few strategic buyers for all of the UK bank’s 62.3 per cent stake in Barclays Africa Group, its Johannesburg-listed subsidiary.
Britain’s Financial Times newspaper said this could mean Barclays has to sell down its African stake into the market “by offloading it in chunks to institutional investors.”
One possible scenario as a result could be that Barclays sells off its non South African based operations including those in East Africa. The Times newspaper said that “among the countries he (Mr Diamond) may especially covet are Kenya, Ghana and Uganda.”
Barclays has a substantial presence in East Africa, with 769,000 customers in Kenya, its second largest market, 561,000 in Tanzania, its third largest and 136,000 in Uganda, its third smallest.
Barclays Africa generates about 20 per cent of its profits from its operations outside of South Africa, which include Kenya, Tanzania, Uganda, Botswana, Mauritius and Zambia.
The London-based bank’s shares won’t be “sold in the short term and a number of players will have a say in the process,” Barclays Africa Deputy Chief Executive Officer David Hodnett said in an interview in with Bloomberg in Johannesburg on Wednesday, without elaborating on who the buyers might be.
It’s too soon to speculate how the British bank will sell its stock, he said, adding that regulators will be looking for investors who offer “long-term stability.”
Barclays plans to sell down its interests over the next two to three years to reduce demands on the capital it needs to set aside for controlling the company.