Companies

Barclays Kenya CEO seeks to calm depositors’ nerves over Africa sale

awori

Barclays Bank of Kenya CEO Jeremy Awori says talks around Barclays Plc’s exit from Africa relates only to its 62.3 per cent stake in SA-based Barclays Africa. PHOTO | FILE

Barclays Bank of Kenya (BBK) has assured its customers that it will continue operating in the country even as its London-based parent Barclays Plc reportedly plans to sell its African subsidiaries.

The bank’s chief executive Jeremy Awori said there are no plans at local, regional or group level to shut down its operations in the country.

He noted that talks around Barclays Plc’s exit from Africa relates only to its 62.3 per cent stake in South Africa-based Barclays Africa, the holding company of its African operations including Uganda and Tanzania.

The multinational also directly owns subsidiaries in Egypt and Zimbabwe.

“Your accounts are and continue to be safe and are not impacted in any way by these speculations,” Mr Awori said in a statement.

Barclays Plc will need to get backing of some of the minority interests in Barclays Africa to proceed with the divestiture, with the multinational saying a minimum voting of 75 per cent is required in such a transaction.

The BBK statement comes after the Financial Times reported that its UK-based parent will Tuesday announce the sale of its interests in Africa.

The proposed divestiture is being pushed by the multinational’s new CEO Jes Staley, according to a report by the London-based newspaper.

READ: Barclays mum amid fresh Africa sell-off speculation

Mr Staley is expected to formally announce the divestiture today when the multinational will also report its performance in the full year ended December 2015.

He has reportedly appointed a subcommittee to study the sale process. If executed as planned, the spin-off will see the multinational sell the 42.6 per cent stake it holds in the Nairobi Securities Exchange-listed firm which has operated in Kenya for a century.

This means minority investors will get a new partner to replace Barclays’ brand and management role, with the lender expected to continue trading at the NSE unless a full buyout is implemented.

The company Monday closed trading at the NSE at Sh12.9 apiece, down marginally from the previous day’s Sh12.95. It has lost a quarter of its value over the past one year, with other banking stocks also posting double-digit declines in an overall market bear run.

The move to sell the African banking units is reportedly linked to recent weak performance, partly fuelled by the weakening of local currencies including the South African Rand which has lost 27 per cent against the dollar over the past 12 months.

Barclays’ African businesses recorded a return on equity (ROE) of 9.3 per cent in 2014, below its target of 11 per cent.

The units had a combined income of Sh563.5 billion in the same period, partly reflecting interest on a loan book of Sh5.4 trillion.