So much for Barclays’ full-fledged push into Africa.
As The Wall Street Journal noted on Monday (Jan. 18), the banking giant was among the vanguard of Western finance firms moving into the sub-Saharan region of Africa. Now, the firm is looking to back out of that arena — in stages.
The financial publication reported that Barclays executives have said that being tied to a “sprawling” business in Africa is not a strong fit with current and changing strategies. Thus, the bank is looking to unload at least part of its stake (62 percent) of the Barclays Africa Group, the publicly traded business that holds the Africa operations. WSJ cited unnamed sources and noted the Africa operation stands as one of the biggest banks on the continent, with 44,000 employees across more than 1,200 branches. The banking operations were built out over several decades, said WSJ.
The planned exit comes in tandem with the strategy by newly installed CEO Jes Staley to bring the bank to bear on a range of more profitable operations. The specter of global financial volatility has rendered emerging markets less attractive, as well, said WSJ. The company is also reducing its footprint in Asia and Europe via sales. Previous CEOs sought to capitalize on a “One Bank in Africa” roadmap that would have continued to capitalize on the region’s population growth, alongside a burgeoning middle class and thus more banking opportunities. But more recently, currency fluctuations have been wide, and several finance ministers have come and gone.
[bctt tweet=”The specter of global financial volatility has rendered emerging markets less attractive.”]
Though the timing and finances tied to the possible exit are as yet unknown, it may be the case that more details emerge when results for the fourth quarter are reported on March 1 of this year. The unit itself generated about $1.1 billion in operating profits through the September quarter, roughly 15 percent of the total firm’s tally.