In March 2016, Barclays announced it was going to separate from the South-Africa-based financial group ABSA (Amalgamated Banks of South Africa). By the end of 2017, Barclays had a little over 14% share in ABSA, from its initial 62.3%. Barclays PLC recently sold the last of its holding, 7.4% in Johannesburg-based Absa Group Ltd.
ABSA was formerly called the Barclays Africa Group but changed its name in 2017. Following this development, ABSA evolved into a more indigenous brand, while Barclays PLC moved to become an independent brand that operates in Africa.
Absa Group Limited’s Barclays-branded subsidiaries operate in seven Sub-Saharan African countries including Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, and Zambia.
With severed ties from ABSA. Barclays announced that it wants to continue its operations in Africa. The bank which has existed on the African continent for over a century now has noted that it is looking for ways to add value to Africa by expanding its scope of operations within the continent.
In light of this, here are 5 key takeaways from the bank’s re-entry into the African financial market;
No retail banking: At the moment Barclays has no plans of creating retail banking services in Africa. Its expansion instead is targeted at high net worth individuals within Africa, as it looks to procure private banking services, alongside investment banking, and corporate. These services, however, are still limited to Kenya, Nigeria, South Africa and Egypt, as the bank notes that these four countries have the highest concentration of wealthy individuals in Africa.
Africa’s wealth growth: The key figure mentioned in this report is $2 trillion. This figure is the estimate of the combined net worth of high-income individuals in Africa. This figure was also projected by the African Wealth Report, to rise by at least 38% over the next ten years, highlighting the main reason Barclays PLC has decided to expand its private services to Africans.
Investment assets: Jean-Christophe Gerard, chief executive officer (CEO), Barclays Private Bank told Bloomberg that the investment opportunities in Africa are fast spreading through sectors such as technology, agriculture, finance, and health. This presents an opportunity for both the bank and its customers, as it can help investors with initiatives aimed at creating investment opportunities such as its Barclays direct-assets program. He also mentioned that Africans investing in UK- real estate is booming, and the bank could help ease the intercontinental real estate transactions.
Emotional connection: One of the key reasons this UK-based bank is pushing its entry into the African market, following its separation from ABSA is Africa’s strong ties with the bank. The strong ties are a result of the bank’s subsidiaries in Africa, its 100-year presence in Africa, and African diaspora footfall in the UK, not to mention its secondary face value like the Barclays Premier League. The bank is confident that it can continue to strengthen its relationship with Africa, as it already has an established history with the continent.
Expansion of staff: Over the last two years, since its separation from ABSA, Barclays PLC has provided private-banking services in Africa, particularly South Africa. During this time it has managed the finances of about 200 individuals and boasts a staff of 15 bankers. However, Jean-Christophe Gerard noted that the new move to expand would need new hands on deck, and the bank is planning to hire more bankers.
