Barclays Africa Has ‘Good View’ on Life After Parent’s Exit

  • ‘Moving parts’ are clouding outlook on reaching ideal state
  • Deputy CEO Hodnett says interest in shares gives bank options

Barclays Africa Group Ltd., the lender that’s being sold by its London-based parent, knows what it wants to look like as an independent entity. Getting there is proving to be the harder part.

“We’ve got quite a good view of what the ideal state would be,” Deputy Chief Executive Officer David Hodnett said in an interview in Nairobi, Kenya, on Friday. “If you ask most banks they’d want institutional shareholders, potentially a cornerstone shareholder and a staff scheme. So we know the direction we want to go. But there are a couple of moving parts.”

Those shifting dynamics include whether Barclays Plc wants to be involved, who the interested parties are, and whether the South African regulator and Johannesburg-based Barclays Africa’s board will be happy with them, he said.

Barclays holds 50.1 percent of the South African bank after selling 12.2 percent through a share sale on May 5, where demand for the securities from money managers exceeded supply. The British lender may opt for another accelerated book build to sell shares in the South African unit, three people with knowledge of the matter said on May 18. The U.K. lender is selling its holdings to boost capital.

Diamond Bid

Former Barclays CEO Bob Diamond has joined U.S. private-equity giant Carlyle Group LLP to work on a potential bid for Barclays Africa. He wants to combine the lender’s operations in 12 countries on the continent with Atlas Mara Ltd., a venture he started in 2013 that covers seven markets in the region.

Dubai-based Abraaj Group is also planning a bid, people familiar with the matter said on May 15. The Public Investment Corp., Africa’s biggest fund manager, said last week it’s forming a group of black investors to buy a stake in Barclays Africa. The South African Reserve Bank has said it wants bank owners to have stability, deep pockets and long-term plans.

“It’s great to see a lot of interest,” Hodnett said. “It gives us good optionality around what the outcomes can be.”

Barclays Africa, which has more than 12 million customers across sub-Saharan Africa, has applied for banking licenses in Angola and Nigeria, where it has a representative office, to offer corporate and investment-banking services, the deputy CEO said.

"In the 12 countries we are in, we still have a lot of work to do,” Hodnett said. “We therefore don’t have a lot of capacity to do huge acquisitions in other African countries at this point.”

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