Barclays PLC, based in London, has successfully completed a programme to reduce its shareholding in Barclays Africa Group. Barclays PLC is now a minority shareholder in Barclays Africa Group and we are working together to achieve the successful separation of the two businesses in an orderly process that is overseen by regulators.
Barclays PLC announced on 1 March 2016 that it would reduce its ownership of Barclays Africa Group from 62.3% to a minority shareholding, over time. Global bank regulations tightened after the 2008 world financial crisis, making it less attractive for international banks like Barclays PLC to own stakes in banks abroad.
On 5 May 2016, the first share tranche of 12.2% was successfully sold through an accelerated book build – reducing the Barclays PLC shareholding to 50.1%.
On 31 May 2017, Barclays PLC further reduced its shareholding to 23.4% through the largest book build in South African history, demonstrating exceptionally strong demand among local and international investors to own shares in Barclays Africa Group.
In September 2017, Barclays PLC transferred 1.5% to an interim structure created by Barclays Africa Group for the purposes of a broad-based black economic empowerment scheme (to be announced at a later stage), reducing its shareholding to 21.9%.
Barclays PLC announced on 1 December 2017 that the 7% stake set aside earlier for South Africa’s Public Investment Corporation (PIC) was transferred to two financial institutions until the PIC achieved regulatory approval to take up the stake in Barclays Africa Group. The transfer signalled the conclusion of the PLC sell-down, leaving the UK company with a 14.9% stake in Barclays Africa Group. Barclays PLC indicated that this was its long-term desired ownership level and it planned no further sales at the time.
The sell-down means that Barclays Africa Group now has a diverse shareholder portfolio made up of supportive, long-term, institutional and individual investors.
The sell-down does not change our position as one of the continent’s largest financial services providers, serving more than 11 million customers through our operations in 10 countries in Africa, including Botswana, Ghana, Kenya, Mauritius, Mozambique, South Africa, Seychelles Tanzania, Uganda and Zambia.
Our shareholding may have changed and our name may change in time, but we are the same financial services provider. Our commitment to the continent is stronger than ever and we are now in an exciting phase of defining and shaping our destiny as a standalone Pan-African financial service provider.
Ten key questions:
1. Why is Barclays selling?
After the global financial crisis in 2008, regulators introduced new rules which have had far-reaching effects on banks. One of the consequences was that it became less profitable for global banks such as Barclays to own large businesses abroad.
Barclays PLC carries 100% of the financial responsibility for Barclays Africa, but received only 62% of the benefits.
2. Will the brand change?
The business that is known as Barclays Africa today has deep roots in Africa. In Kenya, for example, Barclays has been a household brand for more than 100 years.
We may have to change our brand over time, but we will not take this decision lightly. It would take some time and we will inform you well in advance.
3. Will you keep your operations in the various countries in Africa?
Barclays Africa owns businesses in 10 markets in Africa and we are not selling any of those as a result of the ownership change between Barclays PLC and Barclays Africa.
Barclays PLC owns part of Barclays Africa. Barclays Africa, in turn, owns businesses in 10 countries, including Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda, Zambia and South Africa, where we are known as Absa. We also have representative offices in Namibia and Nigeria.
4. How does Barclays leaving affect customers and partners?
Like most large companies that have been in business for more than a century, we have had several shareholder changes over that time.
As has been the case during most shareholder changes, for the most part, it will be business as usual for our customers and partners. We will let you know well in advance if there are any changes.
5. Who are the new owners?
Barclays PLC is selling some of its shares in Barclays Africa in several transactions. In the first transaction, conducted in May 2016, 12.2% of its shares were sold to a number of well-known fund managers, including South Africa’s Public Investment Commission (PIC), which manages government employees’ pension money.
As of June 2016, Barclays PLC owned 50.1% of our company. The second-largest shareholder was the PIC, followed by Stanlib Asset Management, Old Mutual Asset Management and Investec Asset Management.
We will know who the final shareholders are when Barclays PLC completes its shareholding reduction programme. Barclays PLC said in March 2016 that it would reduce its shareholding over a period of two to three years.
6. What role do regulators play in the process?
Bank regulators in the UK and in Africa, including the South African Reserve Bank, have several requirements that we must meet to ensure that there are no disruptions to the markets in which we operate.
Barclays PLC and Barclays Africa are working together to ensure that the process is undertaken in an orderly way.
7. Is my money safe?
Our customers can be just as confident doing business with us today as they have always been.
We are financially independent from the global Barclays group and always have been.
We remain a well-capitalised, profitable bank, regulated by the South African Reserve Bank and by the regulators in each of the countries in which we operate.
8. Is Barclays Africa dependent on the global Barclays group for funding?
No. Barclays Africa is not reliant on the global Barclays group for funding, capital or liquidity.
Barclays Africa is independently listed on the Johannesburg Stock Exchange. We have a strong balance sheet of over R1 trillion and are well capitalised.
9. Is Barclays Africa going anywhere?
Certainly not. We continue to invest and grow in Africa where we make a significant economic contribution. In the 2015 financial year, Barclays Africa:
- Paid R8.6bn in dividends to shareholders
- Contributed R7.3bn in taxes
- Paid R20.9bn in salaries to 41 772 employees, investing R2.3bn in training and development
- Served 12.3m customers and clients, providing over R703bn in gross loans and advances, safeguarding R688bn in deposits and managing more than R276bn of assets on behalf of our customers and clients
- Spent R14.6bn on procurement
- Invested R192m in community programmes and 11 284 employees volunteered 66 709 hours
- Reached 25 966 SMEs through a series of seminars, conferences and workshops
Source: Barclays Africa 2015 Integrated Report
10. How are Barclays in Egypt and Zimbabwe affected?
Barclays Africa does not own the Egypt and Zimbabwe operations. Barclays PLC owns Barclays in Egypt and Zimbabwe. In March 2016, Barclays PLC announced that it would sell the Egypt and Zimbabwe operations and subsequently announced in October 2016 that Barclays in Egypt would be sold to Attijariwafa Bank.
