Picture: BLOOMBERG/CHRIS RATCLIFFE
Picture: BLOOMBERG/CHRIS RATCLIFFE

LONDON-based Barclays plc will sell down its 62.3% stake in Barclays Africa over the next two to three years, it said on Tuesday morning.

Barclays Africa shares fell as much as 6.9% to R126.61 in early trade on Tuesday following the announcement.

Barclays Plc said although the African operations were well diversified and a high quality franchise, its investment presented challenges such as the level of capital it held in Barclays Africa.

"The (Barclays Africa Group) board notes that it is clear from this announcement that Barclays plc is reducing its shareholding in Barclays Africa due to recently introduced regulatory burdens specific and particular to Barclays plc as a UK-headquartered and globally significant financial institution," it said.

"These regulations significantly decrease Barclays Africa’s standalone returns for Barclays plc.

"We will now actively engage with Barclays plc and our regulators to ensure this process has an appropriate and satisfactory outcome for all our stakeholders."

The British bank’s divestment from SA would be its second in 30 years.

In 1987 a large portion of shares of the then Barclays National Bank was sold to Anglo American and its affiliates, De Beers and Southern Life.

Barclays National Bank was changed to First National Bank of Southern Africa, with the parent company’s share reduced from 100% in 1971 to 40.4% in 1985.

When Barclays sold, it was embroiled in controversy when its MD, Chris Ball, approved an overdraft facility for businessman Yusuf Surtee, a sympathiser of the United Democratic Front, an antiapartheid coalition. The money was used to pay for newspaper adverts, calling for the unbanning of the African National Congress.

In 2005, Barclays returned to SA when it bought a 55% stake in Absa for $5.5bn. It increased that to 62.3% in 2013 and created what is now called Barclays Africa. In that transaction, Absa Group bought eight of Barclays’s African operations for R18bn.

In response to reports of Barclays’s plans for Barclays Africa, Barclays Africa has moved to reassure customers and investors that it is an independent entity and well capitalised, "with a track record of generating strong returns".

It said that it had a strong and independent board and would "continue to operate in the normal course of business".