Barclays may be wondering if it was all worth it. The British bank with Quaker roots has been in Africa for decades, but today has finally announced that it will pull out from the problem-hit but fast-growing continent within three years.
Africa has been a long-running problem for the bank. Along with protests about Margaret Thatcher’s poll tax and in support of striking miners, Barclays found itself on the receiving end of student protests across the country in the 1980s for its presence in South Africa during the apartheid regime.
After trying to ride out the criticism while seeing its share of the student banking market fall from 27 per cent to 15 per cent, Barclays decided to pull out of South Africa in 1986.
It was left with a raft of lawsuits which alleged that foreign companies, from oil producers to banks, had benefited from the apartheid regime and helped successive repressive governments to retain power.
Barclays also ran into trouble in other countries, such as Zimbabwe. Having been in the country, then named Rhodesia, since 1912, it stuck it out through the controversial Unilateral Declaration of Independence by Ian Smith in 1965, which was widely criticised for favouring the white minority over the black population.
Advertisement
Barclays returned to South Africa in 2005 with the £2.9 billion purchase of a majority stake in Absa, South Africa’s largest consumer lender, and now has a presence in 12 African countries. Its 62.3 per cent stake in Absa is listed in Johannesburg and is worth about £3.5 billion.
In selling the business, there may be many challenges, especially the fall and ongoing volatility of the local currencies on the back of the collapse in oil and commodity prices. However, Barclays today noted that stripping out the currency movements, the business has done well, delivering a 15 per cent return on equity for 2015.
