Barclays Cuts Holding in Africa Unit to 15%

By Ian Walker and Max Colchester Features Dow Jones Newswires

Barclays PLC (BARC.LN) said Thursday it will now sell 285.69 million shares in its African unit, more than originally planned because of strong investor demand, reducing its shareholding to 15%.

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The U.K. bank said Wednesday it would cut its stake in Barclays Africa Group Ltd. to around 28% from 50.1%.

Barclays has now raised 2.22 billion pounds ($2.85 billion) from the sale, which should ease capital concerns swirling around the lender. The shares were sold at 132.0 South African Rand ($10.06) each.

In 2016, Barclays' Chief Executive Jes Staley pledged to end its century-long presence in Africa to drum up funds that could be redeployed to other parts of the franchise. The bank spent the past few months locked in negotiations with regulators to get the signoff to shed part of its African stake.

The sale offers some reprieve for Mr. Staley, who is being probed by U.K. regulators over his attempts to silence a Barclays' whistleblower. Barclays is expected to announce next month that it will close its "noncore" division, which houses the bank's unwanted assets, a move which the U.S. executive says shows that the turnaround at Barclays is nearly complete.

Mr. Staley decided to shed Barclays' African business in part because regulators make the large bank hold extra capital against the unit. A smaller, less-risky bank wouldn't have to do this. Barclays also estimates that a U.K. tax on bank balance sheets means it would pay an extra GBP200 million in levies by 2021 to keep its African unit on its books.

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Once Barclays is a minority owner of Barclays Africa it can deconsolidate the unit from its accounts and get regulatory clearance not to hold capital against it.

Outside its 12-country Africa unit, Barclays also owned a lender in Egypt, which it sold. It still controls a Zimbabwean bank.

Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749 and Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

June 01, 2017 03:07 ET (07:07 GMT)