Business

Could Barclays Africa find a familiar home?

The headquarters of Barclays' South African subsidiary Absa bank in Cape Town Image copyright Reuters
Image caption The headquarters of Barclays' South African subsidiary Absa bank in Cape Town

The news that Barclays intends to retreat from Africa after 100 years of doing business there was one of the most eye-catching lines from the new chief executive Jes Staley.

In recent years, former chief executive Antony Jenkins and before him Bob Diamond had described Africa as an important growth market for the bank.

Admitting it was a difficult decision, Jes Staley explained it was a decision taken to de-risk the bank. Owning a majority share meant Barclays had to hold a lot more capital as a buffer against mishap with, what regulators consider, a risky asset.

Barclays Africa employs 45,000 people, a third of Barclays' global workforce, so it is not an easy thing to sell and the list of potential buyers is not a long one.

At the top of that list is... you guessed it, ex-Barclays chief executive Bob Diamond.

Mr Diamond left Barclays under the cloud of the Libor rate-rigging scandal having lost the confidence of the governor of the Bank of England.

Once described as the unacceptable face of banking by Peter Mandelson, Bob Diamond went on to create an African banking venture called Atlas Mara with ambitions to create a sub-Saharan banking business.

As chairman he has appointed another ex-Barclays man, John Vitalo, as chief executive. Before joining Barclays, Mr Vitalo ran Absa Capital, the investment-banking arm of the South African lender Barclays bought control of in 2005.

I am told that although Atlas Mara may currently lack the firepower to buy the whole business, it would be interested in acquiring some of Barclays' African business.

There is no guarantee this curious circle will be completed - other interested parties could include Gulf and Chinese interests - but Bob Diamond and John Vitalo know this business inside out and Barclays certainly have their numbers.

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