Cape Town - UK banking group Barclays Group on Tuesday made firm its intention to sell its 62.3% stake in Barclays Africa Group (BAGL, formerly Absa) [JSE:BGA].

The global banker listed as part of its rationale for the sell-down that despite a strong returns profile locally, Absa's contribution is significantly diluted at Barclays Group level.

The bank also carries 100% responsibility with only 62.3% benefits, it said at it s results presentation.

Barclays said the sell-down will lead to further simplification of the group, resulting in cost reductions.

The sell-down would mean an approximate £2bn cost reduction and take out 40 000 heads out of Barclays Group.

Barclays said it intends selling its African business over the coming two to three years "to a level which will permit us to deconsolidate it from an accounting and regulatory perspective".

The intended sale is subject to shareholder and regulatory approvals.

The announcement came as the UK bank announced net losses more than doubled last year.

Barclays Group said Absa is a well-diversified business and a high quality franchise. "However the stake in BAGL presents specific challenges to Barclays as owners, such as the level of capital held in respect of BAGL, the international reach of the UK Bank Levy, the GSIB buffer, and MREL/TLAC and other regulatory requirements."

Barclays Group Africa on Tuesday reported a 17% return on equity for 2015 in its standalone local currency results versus the 8.7% return reported for Africa Banking in Barclays’ results, the group said.





Barclays CEO Jes Staley said in his year-end review on Tuesday Africa Banking performed well despite currency headwinds.

“Through Barclays Africa, we have excellent franchises in Africa, with a great management team,” said Staley.

Barclays Group Africa's share price dropped 3.20% to R131.65 shortly after the announcement.

Barclays plc will retain a minority stake in Barclays Africa, the latter tweeted.