African Economy: Barclays to cut Africa stake below 50%

Follow 9News Nigeria On Social Media

A women carries her belongings on her head as she walks past a Barclays logo in Johannesburg December 16, 2015. REUTERS/Siphiwe Sibeko
Social sharing

Barclays is expected to sell more of its stake in its African subsidiary in the coming weeks to take its holding in the business to less than 50% and strengthen the UK parent bank’s capital.

A lock-up period following a previous share sale expires on Tuesday, and Barclays is expected to sell more stock in Barclays Africa as part of its plan to deconsolidate the business.

Barclays CEO Jes Staley, who took over a year ago, decided in March to sell down the stake in its African operations because the bank’s 62% ownership meant it had to fully allocate capital to the business, but got less than two-thirds of its profits.

The bank sold a 12.2% stake on May 4, leaving it with 50.01%. It needs to reduce the holding below about 20% for it to be deconsolidated from its accounts.

The May sale went smoothly and bankers said there was strong demand, with the book 3.5 times oversubscribed.

“Given the success of our initial transaction, and the strong level of interest that we are getting with respect to the asset, we have increased certainty in our ability to achieve deconsolidation with Barclays Africa,” Staley said after the bank’s half-year results on Friday.

READ ALSO  BREAKING!!! Detained Binance Executive Escapes From Custody, Flee Nigeria(Photo)

“People who bought into that offering (in May) have done quite well so I think when we are prepared to do the next tranche we are very confident that the demand is there,” he added.

Staley said the bank was giving itself time to complete the sell-down because it was complex, including current negotiations on what operational agreements will look like between itself and Barclays Africa when it becomes a non-controlling shareholder.

The sell-down and other disposals of non-core assets should boost Barclays’ common equity capital ratio by about 100bp. Its CET1 ratio at the end of June was 11.6%.

Barclays’ capital position has come under renewed scrutiny after results from a European stress test on Friday showed it had a weaker capital position than many analysts had expected. The results did not take into account the Africa and other non-core asset sales, and analysts said the bank’s capital strength was adequate.

Barclays Africa is listed in Johannesburg and its shares were trading on Monday at R157. They were sold in the May offer at R126, raising R13bn (US$872m). At the current price, Barclays’ holding is worth almost US$4.5bn.

For the first sale, Barclays was sole global coordinator and joint bookrunner alongside Citigroup, JP Morgan and UBS.

READ ALSO  Leaked Tinubu’s 47 Ambassador Nominees (See Full List)

South Africa’s Public Investment Corporation (PIC) was an anchor investor in that offer, taking one-tenth of the shares sold, or a 1.2% stake.

Barclays has considered selling all of its stake and has attracted interest, including from former CEO Bob Diamond and private equity firms. But South Africa’s banking regulator has said it may not welcome a private equity buyer, making a sale of shares in the open market the likely exit route.

 

-Reuters (Steve Slater)

 

Leave your comment on this post

THE ROTTEN FISH: CAN OF WORMS OPENED OF APC & TINUBU'S GOVERNMENT OVER NIGERIA'S ECONOMIC DOWNTURN

WATCH THE CRITICAL ANALYSIS AND KNOW THE RESPONSIBLE PARTIES TO BLAME FOR NIGERIA'S ECONOMIC CHALLENGES, WHILE CITIZENS ENDURE SEVERE HARDSHIPS.

Watch this episode of ISSUES IN THE NEWS on 9News Nigeria featuring Peter Obi's Special Adviser, Dr Katch Ononuju, 9News Nigeria Publisher, Obinna Ejianya and Tinubu Support Group Leader, McHezekiah Eherechi

The economic crisis and hardship in Nigeria are parts of the discussion.


Watch, leave your comments, and share to create more awareness on this issue.


#9NewsNigeria #Nigeria #issuesInTheNews #politics #tinubu THE ROTTEN FISH: CAN OF WORMS OPENED ...
DON'T FORGET TO SUBSCRIBE AND LEAVE YOUR COMMENTS FOR SUBSEQUENT UPDATES
#9newsnigeria #economia #economy #nigeria #government @9newsng
READ ALSO  Earning ₦200K Monthly In Nigeria Is Better Than £2000 In UK - Allen Onyema

www.9newsng.com

Leave your comment

Click on the link below or Scan the QR Code to join the 9News Nigeria WhatsApp Channel

9News Nigeria Investigative Reports WhatsApp Channel
9News Nigeria Investigative Reports WhatsApp Channel
About 9News Nigeria 13308 Articles
9News Nigeria is Nigeria's favourite news source. For Authentic, Unbiased News on Politics, Business, Sports, Technology, Entertainment and Lifestyles, Health, Nollywood, Crime and Investigations, Family and Relationships, Inspirations .. and much more. For Latest News from Africa and around the world, 9News Nigeria is your best source. WhatsApp +2348115805632 Email: info@9newsng.com Facebook: www.facebook.com/9NewsNG | Twitter/Instagram: @9newsng

Be the first to comment

Leave your comment