Barclays PLC to pay £ 765m towards its African split

Barclays PLC has submitted an application to the South African Reserve Bank for approval to reduce its stake in Barclays Africa to below fifty percent.

The application will require the approval of South Africa's Minister of Finance.

Already Barclays PLC has agreed to pay 765 million pounds to Barclays Africa for it to split from the African business.

The amount is expected to be channeled into technology, rebranding, separation related expenses among others.

Twenty-seven million pounds (£27.5m) out of a total of 55 million pounds to cover separation related expenses, was paid by Barclays PLC in December 2016.

“Before it can sell down any further, Barclays PLC needs to get regulatory approval…as to who the buyers are likely to be, the company has to be approved first before any further decision can be made on whether that could be obtained through the bookbuilding exercises or any other mechanism,” CEO for Barclays Africa, Maria Ramos said on Thursday.

Maria Ramos further said Barclays should be able to build the leading Pan African financial institution it aims at upon the separation.

“Separation gives us the opportunity to unlock the potential to do things differently and build energy and momentum for our future as a pan-African organization.”

Barclays Africa in a statement on Thursday also revealed that its headline earnings increased 5 percent to R14.9 billion, with South Africa up 2% to R12.2bn and rest of Africa up 17% to R2.8bn.

Also the group's revenue grew 8 percent to R32.4 billion.

However, its impairments increased by 26 percent resulting in a credit loss ratio of 1.08% from 0.92%.

Barclays PLC in May 2016, sold about one-fifth of its stake in Barclays Africa Group Ltd. for about $879 million as part of Chief Executive Officer Jes Staley's plan to overhaul the British lender.

The bank sold 12.2 percent of Barclays Africa's shares to money managers, leaving it with a holding of 50.1 percent.

Among the support that Barclays PLC offers to its African business group include technology, branding, human resources, credit risk management, strategic development and operational management support.

Some analysts have stated that the split is expected to cost Barclays £4.16bn.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana