Barclays Africa Hastens Talks to Buy Banks in Egypt, Zimbabwe

Barclays Africa Group Ltd. said talks to buy its parent company’s operations in Egypt and Zimbabwe have been accelerated following management changes at Barclays Plc.

“Our ambition is to do the acquisition of both, and the management changes have confirmed that that ambition will be realized,” Maria Ramos, chief executive officer of the Johannesburg-based lender, said Wednesday on a conference call. Barclays Executive Chairman John McFarlane “came to South Africa very shortly after his appointment and there’s very firm support for the Africa business,” she said.

McFarlane fired Barclays CEO Antony Jenkins this month and took control, saying he will boost revenue and double the share price over the next three to four years. Planned job cuts haven’t targeted the African operations, where the bank is seeking to expand in economies offering faster growth than more developed countries.

Barclays Africa is awaiting license approvals in Nigeria where it so far has a representative office for its corporate and investment bank. Expansion in Africa’s largest economy will be “organic,” Ramos said.

First-half profit climbed 9.8 percent to 6.77 billion rand ($539 million) in the six months through June after retail and business banking earnings rose, bad debts declined and it expanded African operations, the bank said in a statement on Wednesday. Earnings from the rest of the continent climbed by 22 percent, more than twice the pace of the 8 percent gain in South Africa.

Forex Probe
Diluted earnings per share excluding one-time items increased 11 percent to 7.97 rand and the bank declared an interim dividend of 4.50 rand per share, a 13 percent increase from the year before. The stock dropped 0.5 percent to 185.84 rand by 9:24 a.m. in Johannesburg. The local benchmark banking index was 0.3 percent lower.

Barclays Africa was named in May as among banks being investigated by South Africa’s Competition Commission for manipulating trading in the rand.

“We’ve had nothing from the Commission on this matter,” Ramos said, declining to comment further.

Barclays Africa is part of a group of banks working together to support loss-making South African clothing retailer Edcon Holdings Ltd., Ramos said. The lender has financial ties to Edcon through its private equity portfolio, through loans to the retailer and because of its ownership of Edcon’s 8 billion rand store-card business.

If Edcon were to fail, the card debt would become a collections book, Ramos said. Losses realized because of Edcon in the first six months weren’t “material,” she said.

In the next six months, Barclays Africa expects its net interest margin to widen “slightly” from 2014, it said in the statement. The bank foresees mid-single digit loan growth, with lending in corporate and investment banking increasing faster than retail and business banking.