Barclays, Africa’s third largest bank, on Tuesday officially announced its decision to exit the continent where it has operated for a century and currently has branches in 12 countries.
The decision by the London-based financial group is seen by analysts as a vote of no-confidence in the future of Africa’s banking business where most economies are struggling to keep their currencies stable as a commodities price rout persists on the international market
Barclays exit from the region is likely to open new opportunities and challenges to the continent’s banking players.
Barclays Africa Group Limited (BAGL), which includes South Africa’s Absa, has 1,267 branches in 12 countries and employs over 45,000 people, translating to a third of its total workforce on the globe.
The future of these employees now hangs in the balance as potential investors have not indicated if they are willing to buy the infrastructure that Barclays Africa Limited owns across the continent.
According to Daily Nation, Barclays’s regional operations and technology office in Nairobi is set to be closed on March 31, and could mean massive lay-offs.
Local unit Barclays Kenya has had to assure its customers, shareholders and employees that it was not closing business in the country.
Several investors, including National Bank of Abu Dhabi, Qatar National Bank and Atlas Mara, a financial vehicle co-founded by former Barclays CEO Bob Diamond, are seen as potential buyers of Barclays stake in Africa, currently valued at $4.83 billion.
According to The News Nigeria, Chinese investors and other likely buyers might however be put off by the fall in commodity prices and falling currency values across the continent.
Many economies in Africa are experiencing tough times as the prices of exports such as oil, copper, coffee and cocoa have tumbled to multi-years lows.
Barclay’s decision to pull out of Africa has been described as a strategic move orchestrated by the group’s new Chief Executive Jes Staley.
Staley told Consumer News and Business Channel that the prospects of African economies was threatened by rampant corruption and misconduct.
The group attempts to sell its units in Egypt and Zimbabwe last year to the South African subsidiary failed. This has increased the likelihood of selling the operations to outsiders with Atlas Mara being seen as the frontrunner.