Barclays Bank Kenya could be sold by its London-based parent Barclays Plc, which is considering selling some or all of its subsidiaries in Africa.
The proposed divestitures are being pushed by the multinational’s new CEO Jes Staley, according to a report by the London-based newspaper Financial Times. Both Barclays Kenya and the UK parent declined to comment on the story.
Mr Staley is said to be examining Barclays’ overall strategy and is expected to present his plans to investors around the time of the bank’s annual results on March 1, 2016.
He is also expected to announce several thousand job cuts in the lender’s investment banking unit, particularly in Asia, according to the paper.
If executed as planned, the spin-off will see the multinational sell the 42.6 per cent stake it holds in the Nairobi Securities Exchange-listed firm which has operated in Kenya for decades.
This means minority investors will get a new partner to replace Barclays’ brand and management role, with the lender expected to continue trading at the NSE unless a full buyout is implemented.
The company on Wednesday closed trading at the NSE at Sh13.2 a piece, up marginally from the previous day’s Sh13.1. It has lost a fifth of its value over the past one year, with other banking stocks also posting double-digit declines in an overall market bear run.
The move to sell the African banking units is reportedly linked to recent weak performance, partly fueled by the weakening of local currencies including the South African Rand which has lost 22 per cent against the dollar since January.
Barclays’ African businesses recorded a return on equity (ROE) of 9.3 per cent in 2014, below its target of 11 per cent.
As mentioned before Barclays has been lagging for too long and we are not surprised if this event materializes.
Source: (Business Daily, Kenyan WallStreet)
