Kenya | Barclays Leaves Kenya Feeling Like `Flowergirls’ in Africa Exit

Nairobi, Kenya, Capital Markets in Africa: Central Bank of Kenya Governor Patrick Njoroge urged Barclays Plc and its Johannesburg-based unit to engage with regulators in the countries in which it operates as the British bank plans to exit the continent.

“It feels like we are being treated like flowergirls” who have no real role to play in the transaction, he said in an interview at the World Economic Forum’s annual Africa conference in Kigali, Rwanda on Thursday, declining to say if he had met with the lenders. “There are consequences of their actions in the 12-plus jurisdictions they operate in. They need to talk to the regulators.”

The London-based lender is reducing its controlling stake in Barclays Africa Group as part of a plan to raise cash, shrink globally and lighten its capital burden. Barclays Africa, formerly known as Absa, is South Africa’s third-largest bank and has operations in 12 nations across the continent, including Tanzania, Zambia, Botswana, Mozambique and Ghana, with more than 12 million customers. It owns 68 percent of Nairobi-based Barclays Bank of Kenya.

Barclays last week sold 12.2 percent of its stake in Barclays Africa through an accelerated share sale that raised about 13.1 billion rand ($874 million), leaving it with a holding of 50.1 percent. About 40 percent of the stock was sold to investors in South Africa and international money managers took up the rest, including well-known institutions and some hedge funds, two people familiar with the transaction said. More than 125 investors were interested in buying the securities, Barclays Africa said.

One of the parties that’s expressed an interest in the African business is former Barclays CEO Bob Diamond, who is readying a bid via a consortium of investors including U.S. private-equity giant Carlyle Group LP. Diamond, who has said he has lined up the capital and long-term investors for a potential offer, would combine the business with his African-banking company Atlas Mara Ltd.

Barclays need “to feel a responsibility about who is going to replace them,” Njoroge said, without being specific or identifying anyone. “It’s not just about who has deep pockets. Owners of banks need to be not only ethical but to be socially responsible. The existing shareholder needs to feel that responsibility.”

Diamond declined to comment on his potential bid during a briefing at the World Economic Forum on Thursday, while South African Finance Minister Pravin Gordhan said he is prepared to listen to anyone who wants to talk.

Diamond may bid for Old Mutual Plc’s Nedbank unit if it fails to buy Barclays Africa, the London-based Financial Times newspaper reported on Wednesday, without saying where it got the information. The London-based insurer is spinning off its controlling stake in the Johannesburg-based lender.

South Africa raised doubts over Diamond’s potential offer for a stake in Barclays Africa when the central bank said last week that private-equity bidders for the country’s third-largest lender would face opposition from regulators. 

Source: Bloomberg Business News