Barclays to surrender control of Africa unit with £1.6bn sale

Barclays gets regulatory approval to offload a big chunk of the division which operates in Ghana, Kenya and other African markets.

Barclays has been given regulatory approval for the sale of its remaining stake in its Barclays Africa Group, according to a unit of the business.

South Africa's finance minister has approved the deal, ABSA Bank said, and this will allow Barclays to begin selling its remaining 50% stake in Barclays Africa Group (BAGL).

The move will form part of its chief executive's efforts to refocus the British lender on higher-growth areas.

ABSA Bank, based in Johannesburg, is the main business inside Barclays Africa Group.

Barclays Bank Egypt and Barclays Bank of Zimbabwe, which sit outside Barclays Africa Group, will also be sold.

Barclays shares had risen as much as 2.5% in London on Wednesday, after Sky News reported Barclays was drawing up plans to reduce its shareholding in Barclays Africa Group Limited (BAGL) from 50.1% to approximately 28%.

A large minority chunk of the shares on offer will be acquired by South Africa's Public Investment Corporation, the African continent's biggest pension fund manager, according to insiders.

It is understood the share sale is being handled by investment bankers at Barclays, Citi and Deutsche Bank.

If successfully completed, the sale will go some distance towards Barclays' eventual objective of reducing its stake in BAGL to below 20%, which will allow the London-based bank to deconsolidate the African business from its balance sheet.

BAGL has a presence in countries including Ghana, Kenya and Uganda and forms part of a presence that Barclays has had in Africa since 1925.

Jes Staley, who has run Barclays since 2015, announced the following year that he intended to withdraw from the business - a process which has required complicated negotiations with local regulators.

The company initially cut its stake in BAGL from 62% to 50.1% in May 2016, and said at its annual results in March that it would continue to sell down its shareholding periodically.

The transaction could raise up to $2bn (£1.6bn) for Barclays, capital which is likely to be redeployed elsewhere in the group.

The deal will come at a tricky time for Mr Staley, however, as he faces investigations by two UK banking regulators for his attempts to identify a whistle-blower who had made allegations about the private life of a senior Barclays executive.

Those probes are expected to take several months, while Barclays is also awaiting the outcomes of investigations by the Serious Fraud Office and Financial Conduct Authority into its multibillion-pound fundraisings during the 2008 banking crisis.

By;Worldcoinsmoney.blogspot.com