Barclays is in talks about combining its African operations with that of majority-owned subsidiary Absa Group in a move aimed at accelerating expansion the continent, the British bank said on Tuesday.
Barclays and Absa, which is South Africa’s third-largest bank and its biggest retail lender, had already agreed to combine strategies in Africa and had set up a joint team of executives to lead expansion.
“This proposed combination of the businesses will mirror the managerial and operational structure we have already put in place. It will provide a platform for further growth,” said Maria Ramos, chief executive of Absa Group and Barclays Africa.
Barclays said combining the businesses would help increase growth opportunities in Africa where Absa has been slow to capitalise on Barclays’ wide presence on the continent, trailing fast-moving rival Standard Bank.
Absa, in which Barclays holds a 56 per cent stake, issued a profit warning in June, sending its shares into a tailspin and igniting fears that its recent recovery was losing steam. “The Africa business is an important long-term growth driver for the business,” said Oriel Securities analyst Mike Trippitt who estimates Barclays’ African loan book will grow by an average 9 per cent per annum between 2011 and 2015 compared with 5 per cent for the group.