Barclays Sells 7.4% Absa Stake, Cuts Holdings by Half

Barclays Plc has sold a 7.4% stake in South African unit Absa Group Ltd, raising $687 million in a bid to bolster its capital levels.

The sale cuts Barclays’ holding by half as it hopes to raise Absa’s core capital ratio by around 10 basis points.

According to a statement released by Barclays on Thursday, the net proceeds from the deal will be used for the group’s general corporate purposes. 

The move comes at a time when Barclays’ capital levels are under scrutiny, after regulators warned Barclays against gaming pension rules to bolster capital ratios.

The remaining 7.4% stake in Absa is now subject to a lock-up restriction, which applies until 60 days after settlement.

Barclays had a 15% holding in the African lender before the sale. The British bank which has had a presence in Africa for more than a century has been reducing its stake in Absa in recent years. Much of its controlling stake was sold off in 2017.

The recent sale marks a further step in the British bank’s exit from Africa, after it announced the sale of Absa in 2016.

Absa, which owns lenders in 10 African countries including Kenya, Tanzania and Botswana, was formerly part of Barclays Africa Group before the bank opted to streamline its African exposure as part of a strategy revamp.