Barclays expected to announce exit from Africa
Barclays has had operations in Africa for almost a century.Barclays’ new chief executive, Jes Staley, is planning to announce today (March 1st) that the British bank has decided to exit its African operations, the Financial Times has learned.
The bank is expected to sell its shares in Barclays Africa, which was created three years ago, when Barclays handed over ownership of eight African businesses to its South African subsidiary in exchange for a 62.3 percent stake in the new Barclays Africa entity.
According to the newspaper, Mr Staley now believes Africa it is becoming a "costly distraction", especially as the South African rand devalues and the country’s economy slows down.
The country's finance minister Pravin Gordhan said the South African economy is "in crisis" - struggling with shrinking growth, 25 per cent unemployment, and widespread poverty.
Several rating agencies have threatened to downgrade South Africa to junk status, which would raise the country's borrowing costs even further.
Barclays has had operations in Africa for almost a century. They include the South African branch network Absa, which is one of the largest banks on the continent with 45,000 employees and 1,267 branches across 12 countries. The bank is also expected to sell its Egyptian and Zimbabwean operations.