Barclays may unwind current SA venture

Click to follow
The Independent Online

Barclays, which is in talks to buy a majority stake in Absa, a South African bank, has said it may have to reconsider its alliance with Standard Bank, South Africa's largest bank.

The alliance, formed last year, has launched a Manchester United-branded Barclaycard in South Africa, the first of seven products the two banks planned to offer. "That will be looked at in due course as part of due diligence, as would any joint ventures,"a spokesman for Barclays said yesterday.

Barclays shares rose 20p to 540p, after falling the previous day when it announced it was in discussions with Absa, South Africa's largest retail bank, which is worth about 40 billion rand (£3.5bn). A successful deal would mean a return to South Africa's retail business for Barclays, which pulled out in 1986 after protests against its involvement in the apartheid era.

The bank, Britain's third-largest by assets, suffered a drop in its share of the UK student market from 27 per cent to 15 per cent before its withdrawal from South Africa. In 1995 it established a corporate and investment banking business in the country but it has no retail presence there.

Barclays' main international rival in Africa, the UK bank Standard Chartered, said it would seek to grow organically in the region. "We will look at other opportunities if they come up," a company spokesman said when asked if the bank was interested in competing with Barclays for control of Absa.

South Africa's biggest trade union federation said it opposes Barclays' move to take control of Absa. The Congress of South African Trade Unions said the ownership of South Africa's banks is already concentrated in the hands of too few people, who are predominantly white, and called on the government to intervene.

Meanwhile, the bankers' union, Sasbo, was supportive of Barclays' bid. "We are tremendously positive about it,"Ben Venter, the deputy general secretary, said in an interview with a South African website.

"We believe it is good for Absa, the country, and in general for growth - and maybe create a few jobs in the process."

Any deal would have to be cleared by regulators and the government. Trevor Manuel, South Africa's finance minister, said on Thursday that the government's "four-pillar" policy of having four big, locally owned banks has not changed, though it might consider shifting its position if it was approached.