Barclays Africa Turns To Social Media To Set The Record Straight
Barclays Africa announced today on Twitter that it is not ending its operations in Africa and no jobs will be lost — a response to viral reports that the company plans to pull out of Africa, VenturesAfrica reported.
The company took advantage of the recent publicity to do a little advertising of its own. It said on its Twitter page it has more than 42,000 employees on the continent, with 1,253 branches and 12 million customers in 12 African countries
Barclays’ new CEO, Jes Staley, will announce on Tuesday the British bank’s plans for its African business, the U.K.’s Financial Times reported on Friday.
“After a review of the African business led by Jes Staley, the bank’s board decided last week that, in principle, it made strategic sense to get out of the continent, according to people familiar with the matter,” read the article on Financial Times.
On Saturday, Barclays Africa responded to customers’ concerns about the future of Absa and whether their cash deposits were safe, BusinessDayLive reported. The reports are “still speculation at the moment” as there had been no announcement by Barclays, the company said. “Barclays Africa is the holding company for Absa and we are strong and independently funded,” the JSE-listed company said on Twitter Sunday.
On Monday, Barclays Africa sent a tweet saying the company would not exit its African operations and no jobs would be lost.
The company sent out other messages on its Twitter page about its commitment to Africa:
- “Barclays Africa is financially-independent, listed independently, and we are not closing our operations in Africa.”
- “Barclays Africa is not closing its operations and there will be no job losses.”
- “We remain committed to Africa, where we continue to be optimistic about our growth prospects & to operate in the normal course of business.”
- “The @Barclays board is evaluating its strategic options in relation to its BAGL shareholding. We expect to update the market on 1 March.”
So who is Barclays Africa? It gets confusing. Barclays Africa Group Limited (BAGL), formerly Absa Group Limited, was originally Amalgamated Banks of South Africa. It’s a South African subsidiary of Barclays Bank. Got it?
The Barclays board created a subcommittee to look into how and when its 62.3 percent stake in Barclays Africa would be sold, the Financial Times. By delegating authority, Barclays avoided having to disclose the decision immediately. The stake is valued at about 76.5 billion rand ($4.8 billion US), according to BusinessDayLive.
When the Financial Times came out with its report in December about Barclays pulling out of Africa, something didn’t quite add up, MoneyWeb reported.
Yes, the rand’s dramatic devaluation has diluted earnings (and return on equity) in sterling. But, even in sterling, the Africa operations generate about as much profit as the entire investment bank. And Barclays Africa Group (chiefly Absa) remains a valuable source of dividend flow for its parent (despite the official line that the dividend is “never discussed”). In fact, the dividends from Absa helped Barclays tremendously in weathering the storm during the global financial crisis.
South Africa’s Public Investment Corporation (PIC) is the largest South African investor in Barclays Africa, with a stake worth 6.5 billion rand ($409.38 million US). It manages about R1.5-trillion ($63 billion) in assets for the Government Employees Pension Fund. PIC told Business Day in January that if Barclays is selling, PIC is buying.
Talk of a Barclays sell-down comes less than three years after Barclays increased its stake in Barclays Africa Group from 55 percent to to 62.3 percent. In that transaction, Absa bought eight Barclays’s Africa operations to form the Barclays Africa Group, BusinessDayLive reported.
The company took advantage of the recent publicity to do a little advertising of its own. It said on its Twitter page its strategy and mission haven’t changed in Africa, VenturesAfrica reported. It has 10,378 ATMs in Africa and its top four countries for banking include South Africa, Botswana, Ghana and Zambia. In South Africa, Barclays says one in four households have a mortgage with Barclys, and it claims to have 25-percent of market share of deposits.