Few Western banks have has had such a long and fruitful presence in Africa as Barclays. The bank has been there the best part of a century (and in 2011 invited MT to Uganda to show off all the work it was doing), but now it looks set to head for the exit.
It’s not going to wind down its Barclays Africa division, but if media reports are to be believed then boss Jes Staley is looking to flog its majority stake in the business, which is listed down in Joburg. According to the FT, the bank’s board has appointed a subcommittee to investigate the practicalities of such a move, and there's likely to be more news tomorrow when it posts its annual results.
And this morning Barclays Africa all but confirmed the plans for a sale, with a statement reassuring investors that ‘any announcement relating to PLC’s shareholding in [Barclays Africa] does not impact the shareholding and ownership’ of its operations across the continent. In other words, Barclays Africa will continue to operate even if it is sold (Whether it clings on to its current parent’s brand is another matter of course).
Getting out might seem like a rash decision given that Africa as a whole is growing faster than most of the developed world at the moment – and its growth is expected to accelerate over the next few years, according to the World Bank. Though it might be lacking in infrastructure, the continent’s financial sector is making effective use of mobile tech to improve its peoples’ access to banking.
But sell-offs are very much on trend in the banking sector at the moment. As they adapt to a more digital age and stricter regulations the likes of RBS, HSBC and Lloyds have been shutting branches and getting out of risky markets. Staley has already ditched Barclays’ Italian, Portuguese and Spanish retail banks and shuttered many of its Asian investment bank offices.
Add to that some tumult in African markets (the South African Rand has halved in value over the past five years and its finance minister admitted the country was 'in crisis’ last week) and the move looks pretty predictable.
That’s not to say it’s the right decision, though. Shoring up the core is all well and good and the days of banks extending their sticky tentacles all over the world seem to be over. But if your core is shrinking then it pays to invest in areas that have got real potential. Just ask Bob Diamond.
Update: Barclays Africa is clearly irked by reports of its sell-off. Some unfortunate social media intern has spent the morning rebutting tweets about the rumoured sale, insisting, 'We remain committed to Africa... It's business as usual.'