Barclays Africa restructures bank into four operating units, makes executive changes
After an unsuccessful attempt to boost group revenues by riding on the back of growth in Africa, Barclays announced in
2016that it was withdrawing from the continent. Analysts speculated that talk about Africa rising was a damp squib, however
the picture was more complicated for Barclays. As the BBC noted, Barclays has not been as nimble as other banks, such as
Standard Bank, Ecobank or GT Bank, which have been snapping up opportunities in Africa. In addition, the merger with
Absa was cumbersome. Absa, meanwhile, has been a success story and a valuable, strong brand in South Africa before
marketing specialists started messing with the details. It’s not surprising, therefore, that Barclays Africa boss Maria Ramos
has signed off on a return to the original name for the group. The Johannesburg-based bank plans to revert back to the
Absa Group Ltd. name, as it was known before Barclays Plc took control of the company in 2005. With the British bank’s
stake now reduced to 14.9 percent, Barclays Africa is also embarking on a plan to double in size and capture at least 12
percent of banking revenues across the continent.
“We will stretch ourselves to develop the platform for double-digit growth and build momentum to accelerate delivery,” Chief
Executive Officer Maria Ramos said on a conference call on Thursday. “This is a critical period in which we will need to
complete our separation from Plc, build and scale new capabilities, and rebuild our organizational and cultural foundations
to capture growth.”
The lender, which has operations in 12 African countries, is forging its own path after Barclays Chief Executive Officer Jes
Staley opted to reduce the British bank’s presence on the continent in favor of a trimmed-down investment bank focused on
London and New York. With the split on track, Ramos, said she will consider appropriate acquisitions to support the
company’s growth plan, explore strategic partnerships and new markets, and use technology so the lender’s operations
become fully digitized.
While Barclays Africa hasn’t set timelines for reaching the goals, it will seek to support the new strategy by:
– Creating a consumer-finance business across Africa to fill a “rapidly growing need,” Ramos said. “We’re going to target
this opportunity with our core middle and affluent customers and fully expect to grow our base here.”
– Building a payments hub. “Payments is a highly profitable area and is growing at 8 percent annually. Our payments hub
needs to be simple and intuitive and work on a single platform across the continent. It also needs to be affordable.”
– Launch a transaction banking platform. “It’s going to account for two thirds of our wholesale revenue in three years. It’s fee
based and has low capital requirements. Again, we need it to work seamlessly with our corporate and small business
propositions, providing great cash management and access to our trade finance products.”
The new strategy, which was pulled together after Ramos at the end of last year gathered more than 600 of the bank’s
42,000 employees at an event over two days, will see Barclays Africa push to regain market share in South African retail,
expand its corporate and investment-banking business and integrate wealth and investment into all consumer-facing
businesses.
Dedicated Resources
To drive the separation from its former parent, Barclays Africa has about 360 people dedicating more than 70 percent of
their time on the program, which seeks to reach full deconsolidation by the first half of 2021, Finance Director Jason Quinn
said on the call. Shareholders will vote on the name change at the annual general meeting on May 15.
New structure
Barclays Africa Group Ltd., South Africa’s third-biggest bank, will be split into retail and business banking, investment
banking, the rest of Africa and wealth and insurance. Barclays Africa is splitting its business away from its former parent
company in a process that began in 2016 and is scheduled for completion by early 2021. The U.K. bank paid the South
African lender 765 million pounds ($1.1 billion) for the separation. The move has meant that Barclays Africa is free to set its
own strategy for growth in South Africa and on the rest of the continent where it has operations in more than 10 countries.
The new structure has four core businesses, each headed by a chief executive officer. These are the Retail and Business
Banking (RBB) South Africa, Corporate and Investment Banking (CIB), Wealth, Investment Management and Insurance
(WIMI) and Rest of Africa (RoA) – 10 markets outside South Africa. South Africa Banking will cease to be a management or
reporting segment.
Deputy Group CEO, David Hodnett is taking a two-month sabbatical.
RBB SA will be headed by Arrie Rautenbach as Chief Executive, currently Chief Risk Officer.
Corporate and Investment Banking will also be a separate business under the leadership of a Chief Executive. Temi Ofong
and Mike Harvey will continue as co-Chief Executives of CIB, reporting directly to Group Chief Executive, Maria Ramos
while David is on sabbatical.
Peter Matlare remains in his current role as Chief Executive of RoA and Group Deputy CEO.
Nomkhita Nqweni continues in her current role as Chief Executive of WIMI.
Yasmin Masithela, currently Head of Compliance, has been appointed Chief Executive, Strategic Services. In March Group
Chief Executive Officer, Maria Ramos said a new entrepreneurial culture and digitization would be central to the success of
the strategy she presented. In this role Yasmin assumes responsibility for the bank’s digital strategy, human resources,
group strategy and takes over the lead of the separation from Barclays PLC.
“We have set a bold ambition to double our share of Africa banking revenues, digitising our organisation end to end and
presenting bold propositions to meet the needs of our customers and clients. This executive committee will work with
leaders and colleagues throughout our business who were also instrumental in shaping our strategy and the group’s new
ambition.” said Chief Executive, Maria Ramos.
Barclays media statement:
Highlights
– Four Core Businesses
– Two new additions to Group executive committee.
– Clear focus on digital and transformation.
Barclays Africa Group Limited (BAGL) today announced a new structure that aligns the group’s executive committee
portfolios with its new strategy announced at the beginning of March. The Group plans to double its market share of Africa
banking revenues from 6% to 12%.
The Group’s new growth strategy aims to deliver on three stated priorities:
– Restoring market leadership in core businesses,
– Creating a thriving organisation; and
– Building new propositions.
Question 1 (30 Marks)
Maria Ramos said a new entrepreneurial culture and digitization would be central to the success of the strategy she
presented. In light of the above statement, investigate the unhealthy cultures that may impact good strategy execution and
the steps Maria should take to change a problem culture at Barclays Africa.
