Johannesburg - Barclays has
agreed to pay Barclays Africa nearly $1 billion to fund
investments needed for it to split from its African business,
paving the way for the British bank to cut its stake to below 50
percent.
Barclays is in the middle of an overhaul that includes
cutting its holding in the African business as part of broader
plan announced a year ago to focus on the United States and
Britain.
In a statement issued shortly after releasing its annual
results on Thursday, Barclays Africa said the money would be
used to invest in technology, rebranding and other separation
related projects.
The agreement requires approval from the South African
central bank and the finance minister, Pravin Gordhan.
For Barclays Africa, Africa's third largest bank by market
value, the split allows it manage its own business on the
continent.
"It gives us the opportunity to unlock the potential to do
things differently and build energy and momentum for our future
as a pan-African organisation," Barclays Africa's chief
executive Maria Ramos said.
The bank's 5 percent rise in annual profit fell short of
forecasts as higher interest rates at home and sluggish growth
elsewhere on the continent hit consumption and investment
spending.
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The South African bank said diluted headline EPS came in at R17.69 in the year to end December.
This was slightly below the R17.95 estimate by Thomson
Reuters's StarMine SmartEstimates, which puts more weight on
recent forecasts and those from historically accurate analysts.
Headline EPS is the primary measure of profit in South
Africa that strips out certain one-off items.
Barclays Africa, along with rivals, has struggled to
increase lending as slowing economic growth in many African
markets tempers demand from corporate clients and rising
interest rates at home hit consumption by retail customers.