Barclays set to exit African business – CNBC

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The bank also sees extra risks of corruption and misconduct in Africa. “Barclays does not own all of the equity, but it owns 100 per cent of the risk if something goes wrong,” said one of the people.

The decision to pull out of Africa will reinforce Mr Staley’s strategy of refocusing Barclays on its core British and American markets. Last month, he announced plans to further trim the investment bank, cutting up to 1,200 staff by closing smaller operations in Asia, Brazil, Europe and Russia.

One benefit of selling out of Africa is that it could address worries about Barclays’ capital. Analysts at Jefferies estimate that a sale could add as much as 0.8 percentage points to Barclays’ core capital ratio — taking it much closer to its 12 per cent target.

“While we expect the process of selling Barclays Africa Group to prove more difficult than the market currently expects … a wholesale exit from Africa would seem to make sense,” Joseph Dickerson, banks analyst at Jefferies, said in a note this month.

Barclays has had operations in parts of Africa for almost a century. Barclays Africa Group Limited, which includes the South African branch network Absa, is one of the largest banks on the continent, with a R991bn balance sheet. It has 45,000 employees — a third of all Barclays staff — and 1,267 branches across 12 countries, including Kenya, Ghana, Tanzania, Mozambique, and Uganda.

Barclays set to exit African business – CNBC