Absa and Barclays in 'one Africa' strategy

23 April 2011 - 15:50 By THEKISO ANTHONY LEFIFI
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Financial services group Absa and Barclays, its parent company, have agreed to implement a new Africa strategy, based in Johannesburg.

From July 1, the head offices of Absa Africa and Barclays Africa will be operationally combined and a new regional office will be established in Johannesburg to deliver the "One Bank in Africa" strategy.

Matthew Warren, a banking analyst with First Avenue Investment Management, believes this will remove the "conflicts" that the financial groups might have when it comes to operating on the continent.

Nesbert Ruwo, senior banking analyst at Intellidex, sees this as a way of cutting costs in their combined Africa expansion strategy.

Absa says the geographical and global product structure will provide a platform that will enable them to look for opportunities to serve customers better.

Ruwo said the recent announcement could be a precursor to Barclays increasing its stake in Absa. "If they are going to drive their Africa strategy from SA, they definitely would need more management influence in the whole business. That would imply that the shareholding might also change in the future."

Errol Kruger, the Registrar of Banks, said Barclays had not indicated any intention to increase its stake in Absa from its current 56%.

Comfort Duma, the assistant general secretary in charge of the Absa portfolio at Sasbo, a finance union representing about 20000 Absa staff members, is to meet with Absa's executives in the first week of May. "We are hearing rumours at the moment. The bank will come and consult with us formally," he said.

Barclays' and Absa's announcement came less than a week after FirstRand's confirmation that it was conducting a due diligence exercise on Nigeria's Sterling Bank.

FirstRand was forced to notify the market after Sterling Bank's CFO Adebimpe Olambiwonnu told CNBC Africa during an interview on its financial results that discussions with FirstRand were ongoing and "quite positive".

FirstRand, which has representative offices in Nigeria, has stated that it would like to enter the Nigerian market through a strategic partnership.

It is believed to be considering spending up to $400-million to fund the investment.

Sizwe Nxasana, FirstRand's CEO, told shareholders at the last annual meeting that the company was targeting "above-average domestic growth markets" and countries that were "strongly positioned to benefit from trade and investment flows between Africa and Asia, particularly China and India".

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