Barclays Bank Ghana has assured its clients that the move by Barclays Plc to offload its stake in Barclays Africa will not affect the fortunes of the bank in the country.
“The decision of Barclays Plc is not a reflection on the strategic direction of performance of Barclays Africa or Ghana”, the bank indicated.
Addressing a news conference in Accra at the weekend, Madam Patience Akyianu said, “Barclays Ghana is a profitable business that is well capitalised, highly liquid and customers should not be worried about the safety of their funds”.
The reaction of the Barclays office in Ghana emanated from the announcement on Tuesday, March 01, 2016 by the Chief Executive Officer of Barclays Plc, Mr Jes Stanley, of the bank’s intention to reduce its stake in Barclays Africa Group Limited.
Barclays Plc has 62.3 per cent stake in Barclays Africa Group and it is said that the decision to relinquish its controlling stake has been purely driven by what has been termed as ‘regulatory pressures Barclays Plc faced including the level of capital it is required to hold in respect to its shareholding in Barclays Africa”.
Riddles after announcement
Could Barclays’ withdrawal from Africa open a door for the bank’s former chief, Bob Diamond? Diamond, ousted from Barclays after its involvement in the Libor scandal, has spent the past few years building Atlas Mara, an Africa-focused financial services group.
According to a Bloomberg report, Atlas Mara’s geographic reach — it has stakes in eight banks in seven African countries – would fit well with Barclays’ sub-Saharan business.
It is well known by Diamond. Most of it was run previously by Atlas Mara’s CEO, John Vitalo when he too was at Barclays. And Diamond is clearly a believer in the long-term future of the continent. The same can’t be said of Barclays’ current management.
Africa makes up about a fifth of the bank’s profit and earnings from the region jumped 11 per cent last year, excluding the impact of currency movements.
It delivered a return on tangible equity of 11.7 per cent in 2015 compared with just six per cent at the investment bank.
“Barclays is in a difficult position. This has absolutely nothing to do with its vision of the future of Africa,” Bob Diamond said during a panel discussion at the Bloomberg Africa Business and Economic Summit in Cape Town.
Barclays’ re-evaluation of its African strategy, and possible scaling back of its operations has more to do with regulation in the UK than its vision for Africa, according to Bob Diamond, former Barclays boss and co-founder of Atlas Mara.
Despite global headwinds that have resulted in the weakening African currencies and slowing growth in markets such as South Africa, Diamond said his risk appetite to invest in African banks is even greater than before.
“We still believe in the [African] story, and the entry points in terms of prices are lower. The competition for acquisitions is lower. The currencies are cheaper compared to international currencies. So frankly we see this as an improving environment,” he stated.
However, not everyone shares his optimism and last month, rating agency, Fitch, gave a negative outlook for the banking sector in sub-Saharan Africa for 2016, citing “sovereign worries”.
In spite of the various comments with regard to the future of Barclays Africa, Madam Akyianu was optimistic that “the strategy for Barclays Africa Group in Ghana has not changed and the bank’s operations will continue as usual”.
According to her, the Group continuous to see Barclays Ghana’s franchise as a “sound and solid” business unit.
It is a fact that the bank in Ghana will soon mark its centenary celebrations and as she puts it, the bank will continue to offer its customers cutting-edge financial solutions and invest in its communities.
Although she continues to boast of the banks’ strong liquidity position, the question experts continue to ask has to do with what the future of the bank will be should Barclays Plc carry out its decision to offload its stake in the Africa group.
Mr Staley said at his news conference that Barclays Plc’s decision to offload its stake in Africa will take between two and three years and there are speculations to the effect that by the close of the third year, the decision to sell off its stake will change.
Happenings in Ghana
Barclays is currently embarking on a new journey of offering unparalleled banking experience for customers through its new branches at Ho in the Volta Region, Osu, Nester Square, Airport City and Knutsford Avenue, all in Greater Accra, and Kejetia in the Ashanti Region.
The branches, just like its competitors, have real-time technology services, making banking so much more convenient for its customers.