Barclays Africa Group Limited (BAGL) and China Development Bank (CDB) have signed a memorandum of understanding (MoU) aimed at strengthening cooperation and exploring opportunities to fund development projects in Africa.

Given CDB’s focus on infrastructure finance for roads, railways and dams, Barclays Africa will leverage the MoU to unlock opportunities in order to strengthen its contribution towards Africa’s economic growth and development. Barclays Africa will also extract synergies from the CDB’s focus on inclusive finance to provide capital to SME’s and low income communities.

In addition, Barclays Africa and CDB will explore reciprocal training and development opportunities for their respective investment teams. In this regard, Barclays Africa has already hosted more than 30 employees from the CDB.

“This MoU represents a long-term commitment by senior leadership at Barclays Africa to strengthen our relationship with the world’s largest development finance institution, which has assets of over US$2-trillion. This partnership will unlock opportunities that are aligned to our Shared Growth approach and could facilitate positive socio-economic impact,” says Barclays Africa’s Corporate and Investment Banking (CIB) Co-Chief Executive, Temi Ofong.

Barclays Africa has a history of more than 100 years in Africa, with deep local and regional expertise. As one of the leading Pan-African banks on the continent, Barclays Africa’s in-depth understanding of local markets and sectors, coupled with a strong branch, ATM and customer networks, is well positioned to provide a unique value proposition to local, regional and global clients.

“Strengthening these kinds of relationships will help our Group identify opportunities aligned to our Shared Growth commitment to leave our communities better than we found them. As a Pan-African bank, Shared Growth gives our business an exciting opportunity to make a difference in our communities and to be part of shaping the collective futures of this great continent,” says Ofong.

The CDB was established in 1994 as a policy bank but now operates as a Development Finance Institution (DFI) for the Chinese Government. By 2017, CDB supported more than 500 projects in 43 African countries valued at USD 50-billion.

In 2016, China Africa trade flow reached US$150-billion, making China, Africa’s largest trade partner for seven consecutive years.

Bank increases higher education support and reaches more institutions

Absa Bank is proud to announce an almost three-fold increase in the Barclays Africa Group’s 2017 CEO Scholarship Fund to R210m. This will result in 3 000 university students across its ten African markets receiving a scholarship for the current academic year. In 2016 the Fund disbursed R80m in scholarships to 2 000 students in universities across South Africa.

The 2017 allocation is in partnership with 21 universities in SA and several others in 9 markets in the rest of the continent.

The CEO Scholarship Fund forms part of the Education and Skills Development pillar of Barclays Africa’s Shared Growth strategy through which it has undertaken to invest R1.4bn in education and skills training between 2016 and 2018. Education and Skills Development, Enterprise Development and Financial Inclusion are the three pillars of Shared Growth, which aims to create shared value for communities and stakeholders.

Barclays Africa Group Chief Executive, Maria Ramos, said “University education unlocks opportunities that can change the lives of young people and the future of our continent. This is an expression of our Shared Growth commitment to help realize Africa’s potential and contribute to long term economic growth. This investment has been made possible by the hard work and dedication of colleagues in our business and I am proud of their commitment to making a visible difference in the lives of thousands of young Africans.”

Psycho-social support

Using a combination of academic performance and financial need, universities identify qualifying students and disburse the funds after consultation with Absa. Many of the qualifying students either have very limited financial resources or fall within the “missing middle” category of students whose parents or guardians can only afford to pay a portion of the required university fees. Successful applicants will also benefit from the leadership and psycho-social support offered by the programme.

In response to the contribution from Absa, Prof Irene Moutlana of the Vaal University of Technology said the university’s allocation will be used to assist needy and deserving students who are studying diplomas and Bachelor’s degrees in Science and Engineering and Technology, adding that “this Scholarship will indeed make an invaluable contribution to the Academic image of the University.”

Professor Anesh Maniraj Singh, Executive Director of the University of KwaZulu-Natal Foundation, said “On behalf of the Vice Chancellor, the Chair of Council and the students of UKZN, I hereby wish to express our heartfelt gratitude to ABSA for this extremely kind and generous donation. The current recipients have been really excited with their funding as I am sure will the next group of students.”

2 250 scholarships will be allocated to South African students, while 750 will go to students in the Barclays Africa operating regions outside of SA. 500 of the local scholarships will be granted to Absa staff member dependents.

Ready to work

The Barclays Africa operations outside of South Africa will begin rolling out their 2017 scholarship programmes when their academic year commences in September.

The Education and Skills Development commitment from Absa also includes:

• The support of 34 TVET colleges as part of the Department of Higher Education’s “Adopt a TVET” programme;
• Strategic University support, focused on research and capacity development initiatives
• School Governing Body training in partnership with the Department of Basic Education, and
• Ready to Work – a free skills development programme to give young people range of work, money, people and entrepreneurial skills to enhance their employment and self-employment prospects.

Together with a set of retail banking products that include a competitively structured student loan scheme and a free youth banking product, the bank has a comprehensive education and youth proposition that responds to broader development needs, which include financial inclusion.

Barclays Africa CEO Maria Ramos has accepted an invitation to become a member of the prestigious Group of Thirty (G30). The G30 aims to deepen understanding of international economic and financial issues, and to explore the international repercussions of decisions taken in the public and private sectors.

Other well-known members of this group include Ben Bernanke, the Former Chairman of the Board of Governors of the US Federal Reserve System; Mark Carney, Governor of the Bank of England; Mervyn King, a Member of the House of Lords as well as a former Governor of the Bank of England; and, William C. Dudley, President, Federal Reserve Bank of New York.

The G30, founded in 1978, is a private, nonprofit, international body composed of senior participants from the private and public sectors and academia. Membership of the G30 is by invitation only.

In a statement issued this week, the G30 noted that, alongside Ms Ramos, Agustín Carstens, Governor of the Banco de México, had accepted membership.

The statement quotes Jacob A. Frenkel, Chairman of the 30 Board of Trustees, as having said: “Maria will add diversity of perspective, and a strong and influential South African voice, to our deliberations.”

“She has a breadth of private and public sector experience that will benefit our work and discussions, from her current positions as CEO of Barclays Africa, as Chair of the Banking Association of South Africa, and her prior role as Director General of South Africa’s National Treasury.”

Ms Ramos said: “It is a pleasure to join the G30, which does such key work on international economics and governance. I look forward to working together on projects of common concern and to supporting the Group’s mission.”

Chairman of the G30, Tharman Shanmugaratnam, noted: “Agustín and Maria are outstanding leaders. They each bring a wealth of understanding of the financial and economic challenges of the times, which the G30 seeks to address through our deliberations and ongoing work program of studies.”

Shanmugaratnam continued: “The work of the G30 in international financial and economic thought leadership relies on its dynamic, engaged membership, drawn from across the globe and across public and private sectors. I very much look forward to Agustín and Maria’s contributions in the years ahead.”

Performance highlights:

(A normalised view is presented to take into account the effect of the separation from PLC)

• Headline earnings increased by 7% to R7.8 billion
• Credit impairments declined 27% from a high base in the first half of 2016
• Revenue decreased 1% to R36 billion
• Effective cost-containment helped achieve cost-to-income ratio of 55.6%
• Return on equity rose to 16.8% from 16.1%
• Balance sheet at R1.1 trillion, with strong capital adequacy and liquidity reserve positions

Barclays Africa Group Limited (“Barclays Africa”), one of the largest financial service providers in Africa with operations in 12 countries, today reported a solid financial performance for the first half of the year, demonstrating continued resilience in a deteriorating economic environment in South Africa, its largest market.

The announcement marked the first time that the company reported results following Barclays PLC’s sell-down of its majority stake in the African business in a share sale that saw exceptionally strong interest for the stock.

“We are presenting a set of results that demonstrate the real value of the 2013 acquisition of the Barclays businesses in Africa,” said Maria Ramos, Chief Executive, Barclays Africa Group Limited. “Both geographically, as well as by customer segment, they are proving their worth in yielding a strong performance for the first half, even as our biggest market, South Africa, has suffered the impact of an economic downturn.”

Summary of results

Barclays Africa Group’s normalised headline earnings increased 7% to R7.8 billion, driven by strong earnings growth in the Rest of Africa, and positive earnings growth in South Africa, featuring strong growth in corporate banking. Impairments declined by 27% from a high base in the first half of 2016, contributing to the improvement in earnings.

Group revenue declined 1% to R36 billion, given a deteriorating economic environment in South Africa, which in turn caused pre-provision profit to decline 6%. The cost-to-income ratio increased to 55.6% despite a focus on cost containment and inflationary cost growth. The return on equity remained attractive and improved to 16.8% from 16.1%.

The group continues to have a sound financial position with balance sheet assets of R1.1 trillion and strong capital adequacy and liquidity reserve positions.

Successful separation from Barclays PLC will be an overarching priority for Barclays Africa over the next three years.

For the remainder of the year, Barclays Africa will place priority focus on its retail and business bank performance in South Africa and on driving opportunities in its businesses outside of South Africa. WIMI will continue to focus on retention of clients and assets, optimising opportunities presented by the pickup in momentum in Retail and Banking South Africa and returning the business outside of South Africa to profitability.

Barclays Africa is also continuing its significant investment in technology to build a more efficient and lower-cost franchise.

“Our results today are testament to the resilience of our business and the momentum we are creating,” Ramos said. “We expect the economic environment to remain challenging but we believe the long-term opportunities remain attractive.” South Africa is in a recession after gross domestic product shrank 0.7% on an annualised basis in the first quarter. Economic growth forecasts for the full year have once again been revised downwards.

Barclays PLC Sell-down

Following the first sale tranche of 12.2% in May 2016, the next milestone was successfully navigated with the second book-build concluded in June – the biggest ever seen in the local market at R37.7 billion. The transaction achieved accounting deconsolidation for Barclays PLC.

“It represents a huge vote of confidence from investors in the group we are creating,” said Ramos. “It has been a great success and removes any uncertainty about our future ownership.”

Looking forward, Ramos said: “This is an exciting time for us and I have said that our ambition remains the same and undiminished. We are building a pan-African financial services business with the potential to unlock the real opportunities and competitive advantages we enjoy.

For more information please contact:

Carli Cooke
Barclays Africa Group Media Relations
011 350 3625
083 652 7371
carli.cooke@absa.co.za
prmedia@absa.co.za

About Barclays Africa Group

Barclays Africa Group Limited (“Barclays Africa” or “the Group”) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest financial services groups.

Barclays Africa offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management and insurance.

The Group operates in 12 countries with approximately 40,000 employees, serving close to 12 million customers.

The Group registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa), Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.

For further information about Barclays Africa, please visit www.barclaysafrica.com

We are pleased to announce that Absa Corporate and Investment Banking acting through National Bank of Commerce (“NBC”) have advised Vodacom Group on the successful TZS 476 billion ($213 million) IPO of Vodacom Tanzania Public Limited Company (“Vodacom Tanzania”) on the Dar es Salaam Stock Exchange (“DSE”).

Vodacom Tanzania is the leading telecommunications provider in Tanzania, offering voice, data and mobile money services to an estimated 12.4 million subscribers. On 1 July 2016, the Tanzanian parliament legislated that telecommunications licensees in the country are required to list a minimum of 25% of their shares on the DSE. Vodacom Tanzania is the first mobile network operator to list on the DSE fulfilling its license obligations.

African equity markets are at a nascent stage of development and in recent years have seen limited capital rising. Against this backdrop, the Vodacom Tanzania IPO stands out as a landmark and transformational transaction in the African capital markets, raising capital from domestic and international investors.

At USD 213 million, the Vodacom Tanzania IPO is the fourth largest in Sub-Saharan Africa, outside South Africa, since 2008 and stands out for a number of reasons:

• The IPO size was nearly four times larger than any previous IPOs done on the DSE and approximately equal to the sum of IPOs combined in the previous 10 years.
• A landmark transaction on the DSE, raising the market capitalization of the exchange by c.10%
• In excess of 40,000 local investors participated in the offer, many who were first time participants in the capital markets
• Raised the profile of the DSE by offering an attractive, investable company for domestic and international investors
• Vodacom Tanzania has successfully fulfilled its regulatory obligations to list
• Vodacom Tanzania was the first telecoms company to market, attracting maximum participation from a developing domestic investor base. It has set the standard for all future telecom IPOs

“This transaction is a milestone in the evolution of the Tanzanian capital markets and consistent with Absa’s vision of Shared Growth in promoting development across the continent,” says Hasnen Varawalla, Co-Head of Banking at Barclays Africa.

“The Vodacom Tanzania IPO was the first IPO of this scale in Tanzania”, says Till Streichert, Chief Financial Officer for the Vodacom Group. “Its success is testament to the nature of the partnership between Vodacom Tanzania, Vodacom Group, the Absa and Barclays team, NBC and other advisors who worked together to deliver a transaction that met domestic regulatory requirements while incorporating international best practice.”

This success was possible as a result of:

• A committed, supportive and experienced management team and shareholders that worked seamlessly with all advisors
• Extensive investor education campaign driven by management, the Tanzanian broker universe and the receiving bank, NBC
• Comprehensive roadshow across all major centers in Tanzania
• Seamless execution by NBC acting as the Receiving Bank, which put a core banking system in place, procured specialised software and dedicated a trained 282-strong IPO team to manage and execute collections for the transaction – processing over 40,000 applications with zero errors

Trading of the Vodacom Tanzania stock on the DSE commenced on 15 August 2017.

“Through our own Shared Growth vision, paired with our expertise in capital markets, we have delivered a transaction that has transformed the Tanzanian capital markets and provides a platform for similar African IPOs. We congratulate Vodacom Tanzania on its debut as a listed company and wish it well for the future”, concludes Varawalla.

Barclays PLC reduces ownership in Barclays Africa to 23.4% in overnight bookbuild

•  Share placement multiple times subscribed
•  Barclays Africa emerges with significantly more diverse shareholder base

Johannesburg, 1 June 2017: Barclays Africa Group Limited today announced that following the completion of South Africa’s largest bookbuild in South African rand, Barclays PLC has sold 33.7% of Barclays Africa’s issued share capital at a price of R132 per share.

This results in accounting deconsolidation of Barclays Africa from Barclays PLC.

Barclays PLC sold 285,691,979 Barclays Africa ordinary shares at a price of R132 per share, which results in Barclays PLC reducing its shareholding to 23.4%, with a further 7% to be taken up by the Public Investment Corporation at a later date, following receipt of the necessary regulatory approvals.

The shares in the overnight bookbuild were multiple-times subscribed and sold to a mix of existing and new investors, both locally and internationally.

The aggregate gross sale proceeds were approximately R37.7 billion.

It was announced in March 2016 that Barclays PLC would reduce its shareholding over time.  The overwhelming investor interest in this bookbuild process that took place overnight has given Barclays PLC the opportunity to expedite this process.

“The completion of this transaction demonstrates an exceptionally healthy investor appetite for Barclays Africa and our strategy of becoming a leading standalone financial services group in Africa,” said Maria Ramos, Barclays Africa Group Chief Executive Officer.

Diverse shareholder portfolio

The significance of this sell-down is that Barclays PLC is no longer the controlling shareholder of Barclays Africa, which now has a diverse shareholder portfolio made up of very supportive, long-term, institutional and individual investors.

Barclays PLC will remain an important shareholder and will support Barclays Africa throughout the sell-down and operational separation processes, which are already well underway. Barclays PLC and Barclays Africa will continue to work with regulators to ensure that the sell-down and separation are managed appropriately, with no unnecessary impact to stakeholders or the business.

According to Ms Ramos, independence from Barclays PLC will create several opportunities, which will ultimately result in benefits for different stakeholders, “This is a very exciting time for Barclays Africa. There is an opportunity for increased African ownership of our business through a planned staff share scheme as well as a broad-based black empowerment scheme that will contribute to the growth of an entrepreneurial culture”.

Barclays PLC will contribute the equivalent of 1.5% of Barclays Africa’s market capitalisation, equating to approximately R1.85 billion (based on Barclays Africa’s share price of R145.95 as at 30 May 2017), towards the establishment of a broad-based black economic empowerment scheme.

As announced in February 2017, Barclays PLC has agreed to contribute approximately R12 billion (£765 million) primarily to fund the investments required for Barclays Africa to complete the separation from Barclays PLC. The contribution will, in part, go towards investments in technology, rebranding and other separation projects.

Opportunity

This process presents an opportunity to modernise and harmonise systems across Barclays Africa operations. Ownership of Barclays and Absa operations in Africa does not change as a result of the reduction in shareholding. The 11 banks that form part of Barclays Africa will continue to be led and operated by people with deep local knowledge and a diversity of skills and experience.

Barclays PLC announced on 1 March 2016 that it intended reducing its 62.3% shareholding in Barclays Africa over time because of regulatory changes in the UK.  On 5 May 2016, Barclays Bank PLC sold 103.6 million shares in Barclays Africa in a bookbuild, reducing its shareholding to 50.1%.

Ms Ramos concluded: “This is a defining moment for Barclays Africa.  We now have a significant opportunity to determine our own destiny and make our own decisions on what is right for a pan-African focused business”.

Barclays PLC has today announced its intention to sell 187 million ordinary shares in Barclays Africa Group, which represents approximately 22% of Barclays Africa’s issued share capital.

This follows receipt of the required regulatory approvals, including approval from the South African Minister of Finance, for Barclays PLC to reduce its shareholding in Barclays Africa to below 50%.

Barclays PLC announced on 1 March 2016 that it intended, over a two to three year period, to reduce its shareholding in Barclays Africa.  On 5 May 2016, Barclays PLC sold 103.6 million shares in Barclays Africa, reducing its shareholding to 50.1%.

The sell-down transaction announced today is in the form of an accelerated bookbuild, which has been activated, and is expected to be concluded overnight.  The conclusion of the sale, which is expected to be announced tomorrow (Thursday, 1 June 2017), will see Barclays PLC’s shareholding reducing to below 50%.

“This transaction marks the next phase of Barclays Africa’s evolution as a standalone pan-African financial services group, committed to Africa,” said Maria Ramos, Barclays Africa CEO.

Please see the SENS announcement

Today’s young graduates are driven by ideas and the desire to effect real change in the world they live in. All they require is the opportunity to bring their ideas to life. It is on this premise, and the belief that ideas can change the world, that the Absa Rising Eagles Graduate Programme is based – to give young graduates the platform to make their ideas happen.

Rising Eagles targets graduates across a multitude of disciplines with a strong focus on, but not limited to, technology, maths, stats, analytics, risk management, finance as well as those with a customer-centric mindset.

As a young graduate, you’ll get the opportunity to work with colleagues across Africa. You’ll work alongside the best in the business – go-getting achievers with sky-high aspirations just like yours. You’ll be challenged. You’ll be inspired to spread your wings. And you’ll define where your ambitions lie within our dynamic, global organisation.

Recruitment for the 2018 Rising Eagles programme is now open and runs until 18 June 2017.

To find out more about the Rising Eagles programme in South Africa, click here.

To find out more about the Rising Eagles graduate programme in the rest of Africa, click here.

 

Key points:

• Headline earnings increased by 5% to R14.9 billion, with South Africa up 2% to R12.2bn and Rest of Africa up 17% to R2.8bn
• Pre-provision profit increased by 10% to R32.4 billion
• Revenue increased by 8% to R72.4 billion
• Barclays Africa Group Limited’s Common Equity Tier 1 (CET1) ratio increased to 12.1%, well above regulatory requirements
• Contribution from non-SA businesses increases to 23% of group revenue
• Revenue grew 8% while costs increased by 6%, with positive effect on our cost-to-income ratio, which improved to 55.2% during the period.
• Impairments increased by 26% resulting in a credit loss ratio of 1.08% from 0.92%

Barclays Africa Group, the financial services group with operations in 12 countries in Africa, today reported a third consecutive year of earnings growth.

“The creation of the Barclays Africa Group was a crucial strategic play – it created the platform for us to develop our businesses,” said Maria Ramos, Chief Executive, Barclays Africa Group. “It has given us a significant footprint across Africa. We set out with a vision to create a proudly pan-African bank and today we can confidently say that we are a delivering on this ambition.”

A key priority since the formation of the group was stemming losses at our retail and business banking (RBB) franchise in South Africa, which remains our largest revenue generator. RBB added 2.5 million new customers over the last three years, generating strong returns.

Other priorities over the past three years included growing our corporate banking operation, which has achieved double-digit growth for the past four years; and, delivering on the opportunity we have in our Wealth, Investment Management and Insurance (WIMI) business, which is achieving an attractive 23.9% return on equity.

2016 performance

Barclays Africa Group’s headline earnings increased 5% to R14.9 billion in 2016 compared with 2015 as efforts to contain costs and increase efficiencies in order to invest in delivering better services to customers yielded results. Revenue increased by 8%, outpacing the 6% increase in the cost of running the business.

Slower economic growth resulted in an increase in impairments, and non-performing loans (where customers are more than three months in arrears). South Africa’s economic growth is expected to have slowed to 0.4% in 2016, while growth in the Group’s presence markets in the rest of Africa slowed to 3.7%, the weakest level in more than a decade.

Credit impairments rose 26% in 2016 compared with 2015, negatively affecting the return that Barclays Africa shareholders earned on the money they invest in the business. Return on equity declined to 16.6% from 17% in 2015.

Outlook

In 2017, we expect to see modest economic recovery with South Africa’s economy estimated to grow at 1%. We expect 4.5% average GDP growth in other markets.

Moderate economic growth and regulatory changes, will impact revenue growth. Positively, we expect that some of the bad debts recorded last year, won’t be repeated.

Barclays Africa Group, which owns Absa in South Africa and the Barclays-branded businesses in the rest of Africa, as well as of the majority of NBC in Tanzania, has strong capital and liquidity levels and is independently funded.

Barclays Africa will continue to invest for growth in Africa and with a footprint in 12 markets, is well positioned to benefit from economic growth.