- Options said to include selling stake in Barclays Africa
- Board said to also discuss bank's latest ringfencing plans
Barclays Plc’s board will debate the future of its Africa business at meetings starting on Wednesday in London, with options including a sale of the entire stake, according to two people with knowledge of the matter.
The board meeting, led by Chief Executive Officer Jes Staley and Chairman John McFarlane, hasn’t been specifically scheduled to discuss the future of the African business, said the people, who asked not to be identified because the agendas of the meetings are private. Executives will also discuss the bank’s latest plans for separating the U.K. consumer and investment banking arms under so-called ringfencing rules, they said.
The British lender owns a 62 percent stake in Johannesburg-based Barclays Africa Group Ltd., which was built up under former CEO Robert Diamond. Staley, under pressure to focus on the most profitable businesses in the U.K. and the U.S., has to decide whether to keep the unit amid concerns over slowing economic growth and a falling South African rand.
If the board reaches a decision, Staley could give more details on his plans for Africa in a strategic update to be presented alongside the bank’s full-year earnings on March 1, said the people. A Barclays spokesman declined to comment on the contents of the meetings.
Barclays shares closed at 168.15 pence in London, up 4.2 percent. They have decreased about 23 percent this year.
In Africa, where Barclays has operated for almost a century, pretax profit slipped 7.7 percent in the third quarter, compared with increases at the credit-card and personal and corporate-banking divisions. The region reported a return on equity of 9.7 percent in the third quarter, below the bank’s target of at least 11 percent.
The bank had 52.2 billion pounds ($75 billion) of assets, or about 14 percent of its total, in the region at the end of the third quarter and employed 44,700 people in Africa and the Middle East at the end of 2014, according to its annual report.
Barclays is also considering selling its Egyptian unit after abandoning a plan to fold it into its Africa business, people with knowledge of the plan said Wednesday. The unit, whose presence in Egypt dates back to 1864, may be worth more than $500 million, according to one of the people. No final decision has been made on a sale, which may attract domestic buyers from the region.
U.K. banks had to submit their “near final” plans for ringfencing to the Bank of England’s Prudential Regulation Authority on Jan. 29, according to a spokesperson. Regulators are seeking to separate riskier investment-banking activities from consumer lending.