Barclays, Absa join African units

Absa and Barclays will consolidate African operations outside South Africa, according to a cautionary announcement by the bank on Sens yesterday.

"This is expected to involve the combination of Barclays interests in Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and the Indian Ocean with Absa," the bank said.

Barclays Bank would remain the majority shareholder of the combined African operations, read the announcement.

With Absa CEO Maria Ramos already in charge of Barclays' African operations, this move would ensure profits from these business units will be reported under her, an analyst said.

"This proposed transaction is the next crucial step towards realising the potential of the combined operations in Africa and delivering our 'One Bank in Africa' vision, providing great growth opportunities for our businesses," Absa said.

The stronger of the two brands would probably be maintained in African countries where both Barclays and Absa have a presence, the analyst said.

But the listings of Barclays subsidiaries in Kenya, on the Nairobi Securities Exchange, and on the Botswana Stock Exchange, will be maintained.

The bank recently moved its regional office from Dubai to South Africa and has made headway in getting a single management team for the continent.

"There can be no certainty that these discussions will lead to a combination," the bank said.

'The proposed combination would not be expected to be completed until 2013," the bank further said.

It cautioned that this might have a material effect on Absa's share price, whether successfully concluded or not.

Asked whether this year's restructuring at Absa was in preparation for the consolidation of African operations, Absa replied: "The two events are not directly linked."