Absa Group Ltd., South Africa’s third-largest lender, said it’s “not worried” about the impact of stress tests on parent company Barclays Plc.
“We went through stress testing last year and all it showed was that Barclays was in a strong position,” Chief Executive Officer Maria Ramos said in an interview at the Fortune Global Forum in Cape Town today. “What is important is that if that’s what’s going to be done, that everyone gets on the same page.”
Banks in the U.K., where Barclays is based, are facing stress tests and may be subject to levies and taxes. The U.S. has also introduced financial regulations that the government says will protect consumers, curb risks, boost surveillance of emerging threats to markets and give regulators more emergency powers to avoid future taxpayer-funded bailouts of too-big-to-fail firms. If the legislation is successful, it may influence banks globally.
“With Barclays there is ongoing work and there isn’t a start date for working together in a particular country,” Ramos said. Absa, which sold a controlling stake in the lender to Barclays five years ago and has been looking for ways to boost growth in Africa through the partnership, will discuss merging the banks’ Tanzanian operations, she said.
Initial Public Offering
Absa plans to hold an initial public offering for its 55.5 percent-owned National Bank of Commerce Ltd. in Tanzania and list it on the Dar es Salaam exchange. Ramos said the public offer, which will dilute the state’s holding in NBC, as it’s known, may take place by the first quarter of next year, after which a merger with Barclays may take place.
The soccer World Cup, which began in South Africa on June 11, has boosted volumes through Absa’s ATMs and at its foreign exchange outlets, Ramos said. The event will pay dividends for the country “for a long time,” she said, adding that a South African bid to host the Olympics “may have some value.”
Corporate bad debts at Absa are on target to peak in the first half, with Absa’s fiscal first half ending on June 30, Ramos said.