Publications
Partners
Harare - Barclays Zimbabwe on Tuesday scrambled to contain a potential run by depositors, after its parent company Barclays announced it is moving out of the country while also disposing of its 62.3% stake in Barclays Africa Group [JSE:BGA], formerly Absa.
Analysts cautioned that depositors, who have been nervy in the past week over speculation that Barclays is moving out of the country, would likely start withdrawing their money from the bank.
READ: Barclays Africa soothes stakeholders, warns of tough 2016
Barclays is among a few foreign banks in Zimbabwe, whose numbers include Standard Chartered and Stanbic, which are stable. They have maintained non-performing loans at around 5% over the past few years, while those of locally-owned banks have ballooned to as high as 18%.
"The bank is one of the stronger finance institutions in Zimbabwe, but Barclays moving out will bring a new investor and new culture of doing business. It will be difficult to find an international investor who is willing to buy out Barclays, although some investors such as Bob Diamond's Atlas Mara have maintained that there is value in Africa's banking industry," said economic analyst Moses Moyo.
Barclays Zimbabwe said on Tuesday that moving out of Zimbabwe and selling down its stake in Barclays Africa has clearly been a "difficult decision".
READ: Barclays axes jobs as net losses more than double
Barclays Zimbabwe however said: "From the perspective of our business, nothing changes today as a result of this announcement. Barclays has been certain that it will manage this process so that it is respectful of customers and colleagues."
Barclays chief executive Jes Staley said on Tuesday morning that there are “further businesses we plan to exit over 2016 and 2017, principally those from the Investment Bank recently announced, our Egypt and Zimbabwe businesses (which are not owned by BAGL)”.
The Zimbabwean unit explained that “at this time, all that has been done by Barclays is to announce their intention to sell their stake in this business”. It further said Barclays Zimbabwe would “continue to focus on providing customers and clients with the high standards of service which they expect and will update them as and when there is anything” further to communicate.
READ: Barclays selling Absa to save costs
Zimbabwe is revamping its banking regulations to improve the ease of doing business. It said negligent bank executives will be penalised with lengthy jail sentences, while the central bank will tighten loopholes for money laundering and externalisation.
