The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

African banking: Barclays and Absa fall out over bank sales

Cross-border partnerships are tricky at the best of times. Each side tends to be wary of the other. Often cultural differences come to the fore. And then there’s the internal politics. So the failure of Barclays and Absa, the South African bank in which Barclays holds a 60% stake, to reach agreement on the sale of the UK bank’s other African businesses will only reinforce the impression that the relationship is tense.

The sale of Barclays’ African businesses, comprising Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and Zimbabwe, to Absa was supposed to be a key pillar behind the UK bank’s investment in 2005 in the South African lender. But in late February the deal fell through as neither side could agree on the valuation. "There’s a big gap between the price we’re willing to pay and the price Barclays is willing to accept," said Steve Booysen, Absa’s chief executive, during a televised presentation, without elaborating on the differences in valuation.

Naturally, Barclays’ officials are putting a positive spin on the failed transaction and talks are continuing to try to combine operations in Tanzania. "The profitability in the sub-Sahara and African businesses has grown very significantly over the course of the last two years since Frits [Seegers, chief executive of global retail and commercial banking] took control," said John Varley, Barclays’ chief executive, during a presentation in February.

"So as an example, if I look at the non-Absa sub-Sahara and African businesses during 2007, [we saw] profit growth [of] 47% versus [the previous] year. As a result two things [are] happening. One, emerging markets business is becoming more valuable in the estimate of stock markets around the world.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree