Barclays Africa Group is expected to share its standalone business strategy with the market after the first half of its financial year.
The banking group, currently in the process of splitting from former UK parent company Barclays PLC (PLC), announced last week that it would change its name back to Absa Group.
Alongside releasing financial results for the year ended December 31 2017, chief executive Maria Ramos outlined the group’s overarching strategy as an independent standalone business. “We have a clear and undiluted ambition to double our market share of African banking revenues to 12%. It is a bold plan for growth,” she said, but did not give a timeline.
Barclays Africa/Absa’s three priorities
Source: Barclays Africa Group 2018
Arrie Rautenbach, who is heading group strategy and the separation from PLC on the African unit’s part, told Moneyweb the target is an indication of the group’s aspirations. “If you look at the current revenue trajectory of the business, what we are saying is to expect that revenue trajectory to look very different as we go down the strategy process, and to start showing much bigger growth and much faster growth.”
He said the strategy shared last week is an overarching corporate strategy, created in collaboration with some 22 000 employees from bank tellers to executives, from which a detailed business strategy would be devised. Part of the business strategy is expected to be shared in August, potentially alongside the group’s first-half results.
The group is to focus on its core businesses, which are expected to deliver much stronger organic growth, and will support the business with corporate-wide consumer finance, payments and transaction banking capabilities.
“Once we’ve got this embedded and we’re comfortable with the management structures and we’ve shifted the cultures to the levels that we want, we are going to start augmenting this strategy with an appetite that will include non-organic growth – acquisitions and partnerships – to continue to accelerate our growth.”
Barclays Africa is to receive a R12.6 billion divorce settlement of sorts from PLC, following its decision to sell its 62.3% stake in the pan-African bank down to 14.9%. It is to invest the money in rebranding to Absa across the continent, separation-related projects and technology. Rautenbach said the investment would be biased toward technology as the group sets up an “independent chassis” especially as the infrastructure behind some of its non-South Africa businesses is managed out of the UK by PLC.
Rautenbach said the final date of dependency on PLC, as negotiated through a number of transitional service agreements, would be June 4, 2020, which is 26 months after the date of the sell-down. The group is said to be on track with its separation-related projects, with 150 on track for 2018 and a similar number in 2019, he explained.