The headquarters of Absa, a unit of Barclays Bank, in Sandton. The bank gave itself two to three years to sell its controlling stake in Barclays Africa when it announced the plan last year. Photo: Bloomberg
London – Barclays plans to sell its African business and pull out of the continent are being hindered by South Africa’s political upheaval and credit-rating downgrades, according to banking sources and fund managers.

The British bank gave itself two to three years to sell its controlling stake in Johannesburg-based Barclays Africa when it announced the plan in early 2016, and sold 12 percent last May in an “accelerated book-build” – a share sale held over a short period of time.

It had been planning another accelerated book-build in the past two weeks, but pushed it back because of concerns over investor appetite due to political and economic uncertainty in South Africa, according to a banking source familiar with the plans.

The source, who is not authorised to speak publicly and asked not to be named, did not say when the deal might now take place.

A spokesman for Barclays in London declined to comment.

The pool of potential buyers to which Barclays can sell shares in its African business is also shrinking, according to bankers, because the mandates of some institutional investors, including some pension funds, do not allow them to hold an asset that’s sliding on credit ratings.

“Barclays have to make a tough call – go ahead and sell Barclays Africa at a low enough price that will attract investors or wait possibly a few years, until the situation has stabilised,” said Kokkie Kooyman, portfolio manager at Dekker Capital in Cape Town.

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The British bank said early last year that it planned to reduce its 62 percent stake in its African business to below 20 percent by 2019 as part of its plan to exit Africa to focus on the US and Britain.

As well as hindering its global strategy, delays in the sale timetable could throw up regulatory problems.

Barclays is partly relying on funds raised from the stake sale to meet capital requirements that were identified as a concern by the Bank of England in a November “stress test” aimed at gauging its ability to withstand financial shocks.