Barclays is expected to sell more of its stake in its African subsidiary in the coming weeks to take its holding in the business to less than 50 per cent and strengthen the UK parent bank’s capital. A lock-up period following a previous share sale expired yesterday, and Barclays is expected to sell more stock in Barclays Africa as part of its plan to deconsolidate the business.
Barclays CEO Jes Staley, who took over a year ago, decided in March to sell down the stake in its African operations because the bank’s 62 per cent ownership meant it had to fully allocate capital to the business, but got less than two-thirds of its profits. The bank sold a 12.2 per cent stake on May 4, leaving it with 50.01 per cent. It needs to reduce the holding to about 20 per cent for it to be deconsolidated from its accounts.
The May sale went smoothly and bankers said there was strong demand, with the book 3.5 times oversubscribed.
“Given the success of our initial transaction, and the strong level of interest that we are getting with respect to the asset, we have increased certainty in our ability to achieve deconsolidation with Barclays Africa,” Staley said after the bank’s half-year results on Friday.
“People who bought into that offering (in May) have done quite well so I think when we are prepared to do the next tranche we are very confident that the demand is there,” he added.