EDINBURGH — After an unsuccessful attempt to boost group revenues by riding on the back of growth in Africa, Barclays announced in 2016 that it was withdrawing from the continent. Analysts speculated that talk about Africa rising was a damp squib, however the picture was more complicated for Barclays. As the BBC noted, Barclays has not been as nimble as other banks, such as Standard Bank, Ecobank or GT Bank, which have been snapping up opportunities in Africa. In addition, the merger with Absa was cumbersome. Absa, meanwhile, has been a success story and a valuable, strong brand in South Africa before marketing specialists started messing with the details. It’s not surprising, therefore, that Barclays Africa boss Maria Ramos has signed off on a return to the original name for the group. – Jackie Cameron
By Janice Kew and Renee Bonorchis
Barclays Africa Group Ltd. is going back to its roots.
The Johannesburg-based bank plans to revert back to the Absa Group Ltd. name, as it was known before Barclays Plc took control of the company in 2005. With the British bank’s stake now reduced to 14.9 percent, Barclays Africa is also embarking on a plan to double in size and capture at least 12 percent of banking revenues across the continent.
“We will stretch ourselves to develop the platform for double-digit growth and build momentum to accelerate delivery,” Chief Executive Officer Maria Ramos said on a conference call on Thursday. “This is a critical period in which we will need to complete our separation from Plc, build and scale new capabilities, and rebuild our organizational and cultural foundations to capture growth.”
The lender, which has operations in 12 African countries, is forging its own path after Barclays Chief Executive Officer Jes Staley opted to reduce the British bank’s presence on the continent in favor of a trimmed-down investment bank focused on London and New York. With the split on track, Ramos, 59, said she will consider appropriate acquisitions to support the company’s growth plan, explore strategic partnerships and new markets, and use technology so the lender’s operations become fully digitized.
While Barclays Africa hasn’t set timelines for reaching the goals, it will seek to support the new strategy by:
Creating a consumer-finance business across Africa to fill a “rapidly growing need,” Ramos said. “We’re going to target this opportunity with our core middle and affluent customers and fully expect to grow our base here.” Building a payments hub. “Payments is a highly profitable area and is growing at 8 percent annually. Our payments hub needs to be simple and intuitive and work on a single platform across the continent. It also needs to be affordable.” Launch a transaction banking platform. “It’s going to account for two thirds of our wholesale revenue in three years. It’s fee based and has low capital requirements. Again, we need it to work seamlessly with our corporate and small business propositions, providing great cash management and access to our trade finance products.”
Maria Ramos: we want to gain 12% of banking revenues across Africa and build a scalable digitally led banking group. Digitizing our enterprise end to end to address customer needs
— Sure Kamhunga (@sure_kamhunga) March 1, 2018
The new strategy, which was pulled together after Ramos at the end of last year gathered more than 600 of the bank’s 42,000 employees at an event over two days, will see Barclays Africa push to regain market share in South African retail, expand its corporate and investment-banking business and integrate wealth and investment into all consumer-facing businesses.
To drive the separation from its former parent, Barclays Africa has about 360 people dedicating more than 70 percent of their time on the program, which seeks to reach full deconsolidation by the first half of 2021, Finance Director Jason Quinn said on the call. Shareholders will vote on the name change at the annual general meeting on May 15.
Barclays Africa earlier on Thursday said full-year earnings before one-time items rose 4 percent to R15.6 billion ($1.3 billion). Its dividend increased by the same margin to R10.70, beating the R10.55 average of 11 analyst estimates compiled by Bloomberg. The stock fell 0.5 percent as of 10:35 a.m. in Johannesburg, compared with a 0.2 percent decline in the six-member FTSE/JSE Africa Banks Index.