Barclays Cuts Holding in Africa Unit to 15%
01 June 2017 - 5:22PM
Dow Jones News
By Ian Walker and Max Colchester
LONDON--Barclays PLC (BARC.LN) said Thursday it will now sell
285.69 million shares in its African unit, more than originally
planned because of strong investor demand, reducing its
shareholding to 15%.
The U.K. bank said Wednesday it would cut its stake in Barclays
Africa Group Ltd. to around 28% from 50.1%.
Barclays has now raised 2.22 billion pounds ($2.85 billion) from
the sale, which should ease capital concerns swirling around the
lender. The shares were sold at 132.0 South African Rand ($10.06)
each.
In 2016, Barclays' Chief Executive Jes Staley pledged to end its
century-long presence in Africa to drum up funds that could be
redeployed to other parts of the franchise. The bank spent the past
few months locked in negotiations with regulators to get the
signoff to shed part of its African stake.
The sale offers some reprieve for Mr. Staley, who is being
probed by U.K. regulators over his attempts to silence a Barclays'
whistleblower. Barclays is expected to announce next month that it
will close its "noncore" division, which houses the bank's unwanted
assets, a move which the U.S. executive says shows that the
turnaround at Barclays is nearly complete.
Mr. Staley decided to shed Barclays' African business in part
because regulators make the large bank hold extra capital against
the unit. A smaller, less-risky bank wouldn't have to do this.
Barclays also estimates that a U.K. tax on bank balance sheets
means it would pay an extra GBP200 million in levies by 2021 to
keep its African unit on its books.
Once Barclays is a minority owner of Barclays Africa it can
deconsolidate the unit from its accounts and get regulatory
clearance not to hold capital against it.
Outside its 12-country Africa unit, Barclays also owned a lender
in Egypt, which it sold. It still controls a Zimbabwean bank.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749 and
Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
June 01, 2017 03:07 ET (07:07 GMT)
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