Barclays has reported a 25 percent drop in profits for the first quarter of 2016, dragged down by the performance of non-core divisions that it plans to sell off including most of its stake in its Africa business, BBC reported.

The bank said its non-core divisions lost $1.19 billion US in the first quarter, with pre-tax profit for the first three months of the year at $1.159 billion, compared to $1.6 billion for the same period in 2014.

U.K.-based Barclays had a “particularly strong” March 2015, but has since endured turbulent market conditions. It has made “good early progress” in its cost-cutting and restructuring strategy, announced in March, Barclays CEO Jes Staley said.

Barclays is selling its 62.3 percent stake in Barclays Africa Group, BBC reported:

In March, Barclays said it would split itself into two main core divisions — Barclays UK and Barclays Corporate and International — to meet new banking regulations, which are aimed at preventing ordinary customers suffering from decisions made by investment bankers in the event of another financial crisis.
Profits at these two divisions rose 18 percent.
But losses at its non-core division, which contains a range of business lines including its European retail operations and some of its Asian banking operations, widened.
The bank plans to have sold off its entire non-core division by the end of next year.

Barclays Africa predicts its credit-loss ratio will get worse as customers fall behind in loan payments and the economy continues to slide in its main market — South Africa, IndependentOnline reported.

In its latest statement, Barclays said it is “continuing to explore opportunities” to reduce its share in the Africa business.

Bob Diamond, who ran Barclays before he was fired in 2012 during the Libor (London Interbank Offered Rate) scandal, confirmed this week that he and investors, including U.S. private-equity giant Carlyle, are working together on a potential bid for the Johannesburg-based Barclays Africa.

Barclays said in a statement it was pleased with the level of interest in buying the business. “We are working closely with local management, including on the planning for the operational separation of the two businesses, in a way that will preserve value for shareholders in both groups.”

At least seven investors said they’re interested in buying part of Barclays’ stake in Africa. These include South Africa’s Public Investment Corporation (PIC), National Bank of Abu Dhabi, Qatar National Bank, Chinese banks, Falcon Private Bank (Switzerland), and Kenya’s Equity Bank. Read more at AFKInsider.

Barclays said it expects to maintain single-digit loan growth this year with the rest of its African operations expanding faster than South Africa, according to IndependentOnline. Revenue continued to improve and growth in the rest of Africa is well above that of South Africa, the company said in its quarterly trading update.

Net interest income saw high single-digit loan growth due to higher interest rates in several markets including South Africa, while the weaker rand featured noticeably during the quarter.

Corporate and investment bank loan growth continued to exceed retail and business banking.

Revenue growth remained solid in target areas including South African retail banking, markets in the rest of Africa, corporate, card acquiring and wealth, investment management and insurance, particularly outside South Africa, IndependentOnline reported.

What happens to Barclays in the future could depend a lot on what the South African Reserve Bank wants, said Brad Preston, chief investment officer at Mergence Investment Managers.

“There are lots of parties involved and lots of different requirements,” he said. “…The SA Reserve bank is going to have a large say in what happens and I would be surprised if they would like to see all of Barclays Africa sold to international investors and delisted,” Preston said.

“In the interests of financial stability, the Reserve Bank will either want to see Barclays Africa with one very strong shareholder of reference or for it to remain listed with a diversified shareholder base,” he added.

Maria Ramos, Barclays Africa CEO, said Barclays Africa has more than 12 million customers in African countries, IOL reported. They include Botswana, Egypt, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, South Africa,
Tanzania, Uganda, Zambia and Zimbabwe.