Barclays Bank and Absa in talks to combine their African operations

NAIROBI, Kenya

Barclays Bank of Kenya this morning filed a cautionary announcement with the Nairobi Securities Exchange confirming its parent company’s intent to combine its Africa operations with those of its subsidiary Absa Group.

Barclays Bank of Kenya Managing Director Adan Mohamed said shareholders are advised that, in line with their strategy to operate as One Bank in Africa, Barclays Bank PLC and its subsidiary Absa Group Limited are engaged in discussions about combining the majority of the Barclays Africa operations with Absa .

The move, Mohamed disclosed is expected to involve the combination of Barclays interests in Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and the Indian Ocean with Absa, with Barclays Bank PLC remaining as the majority shareholder of the combined African operations.

“The listing of Barclays Bank of Kenya on the Nairobi Securities Exchange would be maintained. Only Barclays’ holdings in Barclays Bank of Kenya would be included in the proposed combination,” Mohamed said. The proposed combination would be subject to, among other things, the approval of the Boards of Barclays and Absa (the latter on the recommendation of the independent members of the Absa Board), as well as Absa shareholder approval and regulatory approvals in the relevant jurisdictions.

There can be no certainty that these discussions will lead to a combination. The proposed combination would not be expected to be completed until 2013. Maria Ramos, Chief Executive of Absa Group and Barclays Africa, said: “This proposed combination of the majority of the Barclays Africa businesses with Absa is the next logical step in delivering our One Africa strategy, which Barclays PLC announced last year. We have already consolidated the regional offices for Absa Africa and Barclays Africa, as well as introduced a global product strategy for banking across the continent. This proposed combination of the businesses will mirror the managerial and operational structure we have already put in place.”

He added: “We are tremendously excited by the opportunities for growth in Africa. We are wholeheartedly committed to our businesses across Africa and this proposed combination will help us to leverage the significant potential of these businesses. It will provide a platform for further growth that we firmly believe will be to the benefit of our colleagues, our customers and clients, our shareholders and the communities in which we operate.”