Bosses at Barclays have reached a £1.3bn deal with one of South Africa’s top four banks, Absa Group, to combine operations and create the largest high street bank in Africa by customer numbers.
The deal is constructed in such a way that Absa will take ownership of the Barclays in nine countries across the continent in a share deal. As a result, Barclays’ will up its share in Absa from 55.5% to a much more significant 62.3%.
It is the first major piece of strategy since Antony Jenkins became the firm’s chief executive earlier this year. Barclays has owned a majority stake in Absa since it handed over $4.5bn back in 2005, and the integration of the two banks began in 2011 when Barclays decided to move out of its Dubai office and have the HQ in Johannesburg.
The chief executive, Antony Jenkins, said: ‘This is a very significant step in furthering our ‘One Bank in Africa’ strategy.’ He added, ‘African economies have exhibited strong growth in the past decade supported by economic reforms. Furthermore, Africa remains under banked relative to developed markets and many emerging markets.’
The new deal lands Barclays with a 14.4 million strong customer base, and means that the ‘scramble for Africa’ in the financial sector has been all but won by Barclays.
And that’s not all on Barclays’ strategy this week. It emerged on Friday that former FSA boss Hector Sants is in talks with Barclays about joining the bank as a compliance and regulatory overseer.
In such a role, Sants would report directly to the chief executive, and it is indicative of an attitude change in the boardroom since new chairman David Walker came on board.
A former boss of the UK’s financial regulator is certainly a significant gesture for a bank that is still mired in reputational difficulty following the fall out from the Libor rate-fixing scandal.
Whether Hector can prevent the bank from getting into further scrapes in the future remains to be seen.