After almost a century of operating in Africa, Barclay will soon be leaving African soil. The new chief executive of the bank is set to announce it this Tuesday and it is said that it is part of their decision to refocus on their core market in the US and UK. Barclays Africa is one of the company's 4 main lines of business. The decision was made stronger by the continuous fall of the bank's stake in recent months and the economic slow down coupled with the devaluation of the South African rand. Here's a link to more on the story: http://www.cnbc.com/2016/02/28/barclays-set-to-exit-african-business.html
The decision to leave Africa apparently is directly linked to the South African rands devaluation against the Pound but politics also does in some way play some role in this. Though they intend to leave Africa since as yet they have no one willing to buy their retail banking business it could take a while before they leave . . .
At the end of the day, Barclays are a business like any other so they will always put profits and the good of their business before anything else. While Barclays pulling out of South Africa will come as a blow to that country, I'm not sure there's a lot that they can do about it in tmtodaya financial climate.
The funny thing is, as a publicly traded company they are legally required to put profits and shareholders interest before anything else. I doubt it will be a blow to SA, there are ALOT of internaional banks in the world that could take over. Or maybe it will open space for a local player to move in. Sometimes businesses have to refocus on what they do well instead of trying to spread themselves too thin.
Good point there pwarbi. Many companies are cutting expenses nowadays because of the global financial problems we are facing today. they are either laying off employees, closing down branches and selling some of their properties. After news on HSBC, now comes Barclay. I'm beginning to wonder who's next on this seemingly trending action that companies are doing these days.
Is it really due to the devaluation of the South African Rand or the threat of the ISIS? I've read that ISIS is expanding its territory in Africa from its stronghold in Libya. But let's hope it's not related to that because if it is then some other US and European companies might pull out as well. China has a lot of stakes in African countries particularly in the mining industry and if the terrorists would show their ugly heads then China may also pull out from Africa. Barclays is a big company that its leaving will definitely affect the economy of South Africa.
