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Barclays Africa unit moves to allay fears

Johannesburg, South Africa | AFP |

Barclays Africa Group Limited (BAGL) on Tuesday said it was committed to the continent after an earlier announcement by its British parent to gradually reduce its majority stake in the unit.

“Our destiny is Africa,” said Maria Ramos, BAGL chief executive, at a press conference in Johannesburg.

“We have invested massively across the continent in the last three years and will continue to do so.”

Cover of Barclays annual statement booklet 2015
Cover of Barclays annual statement booklet 2015

Barclays announced early Tuesday its intention to sell down its 62.3-percent interest in the African unit, revealing annual losses after tax of £394 million ($549 million, 505 million euros) for the bank as a whole.

The 2015 net loss — against the £174 million posted a year earlier — was largely the result of money set aside to compensate customers mis-sold a controversial insurance product, or PPI.

But Ramos said Barclays Africa’s strategy would not be changing “just because our shareholders are changing”.

“Nothing in today’s announcements will make us deviate or change our course. We are not exiting our operations in any of our African markets.”

Established in 2013, BAGL now has 11 banks across 12 countries.

Ramos stressed it was not financially reliant on Barclays, with an independent board and a separate listing on the Johannesburg Stock Exchange.

“We will now actively engage Barclays and they will begin engaging with who will be out there as buyers. I’m sure what we have is a phenomenal institution,” she said.

Barclays is facing major changes under new chief executive Jes Staley, an American who began his role in December.

Staley has been tasked with restoring the bank’s battered reputation caused by a series of scandals including the rigging of foreign exchange and Libor interest rate markets.

Barclays shake-up

Barclays on Tuesday revealed a further shake-up of the beleaguered bank, unveiling plans to exit its African operations, as it seeks to restore its battered reputation under new leadership.

In a sign that Barclays remains mired in problems, the British lender announced that net losses had more than doubled last year.

The bank also said it was looking into “suspected money laundering related to foreign exchange transactions in South African operation Absa Bank Limited”.

The lender, struggling to recover from several scandals, said it would split the bank into two units, focusing on its operations in Britain and the United States. It comes as Barclays revealed annual losses after tax of £394 million ($549 million, 505 million euros).

The 2015 net loss, compared to one of £174 million a year earlier, was largely the result of money set aside to compensate customers mis-sold a controversial British insurance product known as PPI.

After announcing in January plans to exit Russia, Barclays on Tuesday said it would reduce its majority stake in the group’s African unit.

“At the heart of… strategy is to build on our strength as a transatlantic consumer, corporate and investment bank anchored in the two financial centres of the world, London and New York,” Barclays said in a statement.

It said it planned to split the company to form Barclays UK as well as Barclays Corporate and International.

Barclays added: “We are today announcing our intention to sell down our 62.3-percent interest in our African business, BAGL, over the coming two to three years.”

Barclays Africa Group Limited insisted however that it remained committed to the continent.

“Our destiny is Africa,” BAGL chief executive Maria Ramos told a press conference in Johannesburg.

“We have invested massively across the continent in the last three years and will continue to do so.”

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