Barclays Plc plans to exit its African business as part of an overhaul of the firm led by Chief Executive Officer Jes Staley, according to a person with knowledge of the discussions.
Staley will probably announce the decision on March 1 as he presents the company-wide review after the board agreed in principle that the business was no longer a strategic fit, said the person, who asked not to be identified because the discussions are still private.
The CEO views Johannesburg-based Barclays Africa Group Ltd. and its struggle with the slowing South African economy as a distraction from Barclays’s other challenges, and the London-based bank wants to refocus on its core U.K. and U.S. markets, the Financial Times reported earlier Friday. Barclays will name a subcommittee to examine how and when to dispose of the division, the newspaper said.
Staley and Chairman John McFarlane will outline their strategy on Tuesday as the bank reports earnings. While Barclays Africa, formerly known as Absa Group, has historically been more profitable than the bank’s other three main divisions, it’s been hurt by the falling South African rand.
The British lender owns a 62 percent stake in Barclays Africa, which was built up under former CEOs John Varley and Robert Diamond. In Africa, where Barclays has operated for almost a century, pretax profit slipped 7.7 percent in the third quarter, compared with increases at the credit-card and personal and corporate-banking divisions. The bank had 52.2 billion pounds ($72.4 billion) of assets, or about 14 percent of its total, in the region at the end of the third quarter.
Barclays shares have lost 23 percent this year, outpacing the 20 percent drop by the Stoxx 600 Banks Index.