A man withdraws cash from a Barclays bank automatic teller machine outside Barclays Plaza in Nairobi. Picture: REUTERS/NOOR KHAMIS
A man withdraws cash from a Barclays bank automatic teller machine outside Barclays Plaza in Nairobi. Picture: REUTERS/NOOR KHAMIS

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NAIROBI — Barclays Africa Group plans to move into the asset-management business in Kenya this year after reaching a deal on Wednesday to buy a majority stake in insurer Kenya First Assurance for 2.8-billion shillings ($29m).

Barclays’s deal to buy 63.3% of the Kenyan insurance company is part of a plan to boost the company’s revenue in its African operations outside SA.

Barclays Africa wanted to grow the revenue contribution from its African markets, excluding SA, from about 15% now to 20%-25% in three years, Lanz Zulu, Barclays Africa’s head of wealth and insurance, said after the deal was unveiled.

"We are actively looking at entering the market for an investment management business," he said, adding this could include setting up a business or buying one.

"We would like to be in the market by the end of the year," Mr Zulu said.

First Assurance, which is ranked in the top 10 of Kenyan general insurers, had after-tax profit of 518-million shillings last year.

Mr Zulu said the deal was subject to regulatory approval in SA, Kenya and Tanzania, where First Assurance also operates.

Barclays said 700-million shillings of the 2.8-billion shillings would go towards a capital injection.

Stephen Githiga, the MD of First Assurance, said the deal would allow the company to access a wider network of sales outlets.

"We have six branches within the region.

"With this transaction, we will be able to sell our products and services to our customers with all the branches of Barclays, which are almost 150 within East Africa," Mr Githiga said.

He said First Assurance would enter the Ugandan market next year.

Jeremy Awori, the CEO of Barclays Kenya, said: "We want to see our bancassurance revenue growing going forward. This represents an avenue for creating revenue."

He expected the deal to be concluded before the end of September.

Reuters