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Barclays Africa mulls investment-bank venture post parent’s exit

Bank would also like to include a sale of shares to black investors as part of the exit plan.

Barclays Africa Group said it is considering a joint investment-banking venture with Barclays Plc as its London-based parent plans to further reduce its controlling stake.

“At the corporate and investment bank the synergies provided a significant advantage,” Barclays Africa chairwoman Wendy Lucas-Bull said at the Johannesburg-based bank’s annual general meeting on Tuesday. “We are looking at the issues business by business and at what the options are, like a joint venture.”

Barclays sold about one-fifth of its stake in the African unit in the market earlier this month as part of CEO Jes Staley’s plan to retreat from the continent and raise cash to reduce its capital burden, leaving it with 50.1%. Barclays Africa’s investment bank has used the UK lender’s distribution, technology and geographic spread to win clients and grow across its 12 operations on the continent.

Barclays Africa has also informed its parent that it would like to include a sale of shares to black investors as part of the exit plan, Lucas-Bull said.

‘Not Clear’

“Black economic empowerment is one of the options we have tabled,” she said. “We’re not clear how far Plc will sell down. They have indicated they would prefer to still have a significant shareholding, but we’re proceeding based on the worst case that Plc goes to zero,” Lucas-Bull said, referring to Barclays.

More than a decade ago, Barclays Africa set up a black-empowerment deal to fall into line with South Africa’s plan to distribute wealth to people who were disadvantaged during apartheid. That stake was diluted over time and while the bank isn’t legally bound to do another deal, the sell-down by the British bank presents an opportunity. The UK lender has said it may take two to three years to conclude the reduction of its stake.

“We continue to work with Plc on a broad range of options,” Lucas-Bull said. “We’re also working with the South African Reserve Bank and regulators across the continent, but we remain focused on the execution of our strategy. The Plc sale of the 12.2% stake demonstrated a very healthy appetite for Barclays Africa, which is very positive.”

© 2016 Bloomberg

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