Bob Diamond is expected to look at parts of the African business being put up for sale by Barclays – which he ran before being forced out during the Libor-rigging crisis – as he attempts to fulfil his ambition of developing a major banking presence on the continent.
The former chief executive of Barclays has already established a banking operation in Africa through Atlas Mara, which is listed on the stock exchange and has a stock market value of around £250m. He created the business with Ashish Thakkar, a British national now based in Dubai.
If Diamond were to make an offer for the Barclays operations through Atlas Mara he would need to raise hundreds of millions of pounds and also find a way to unravel the complex Barclays operations in Africa, which could prove to be extremely difficult.
Speculation about Diamond’s interest in buying up some of the operations owned by his former employer have been rife after Barclays confirmed this week that it intended to scale back on the continent as a part of an effort by its new chief executive, Jes Staley, to simply the business and preserve capital.
The Financial Times reported (£) that Diamond could seek backing from sovereign wealth funds in the Middle East or Asia to support any bid and calculated that the value of the Barclays operations outside South Africa that could fit with the Altas Mara business are valued at £1.5bn.
Staley wants to reduce Barclays’ 62.3% stake in its African business, which is listed on the Johannesburg stock exchange. Barclays made a big push back into South Africa 10 years ago when it bought a 60% stake in local bank Absa. The business has now become Barclays Africa Group Limited, which is listed on the stock market and holds most of the bank’s operations in Africa.
Barclays has admitted it could take two to three years to reduce its presence in Africa, which generates about 20% of the bank’s profits and is prepared to hold a smaller stake in the Johannesburg-listed business. It did not elaborate on its statement from Tuesday when it announced its profits had fallen 8% to £2.1bn in 2015 and warned it was more than halving its dividend for this year and next.
Altas Mara, which refused to comment, already has operations in Nigeria, Rwanda, Botswana and is focused on developing on the continent, but not in South Africa where the bulk of Barclays’ operations are based.
This article was written by Jill Treanor, for theguardian.com on Friday 4th March 2016 13.02 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010