Barclays reaches $988 million deal to separate from Barclays Africa Group

Barclays has reached an agreement with Barclays Africa Group to pay £756 million ($988 million) to cancel contracts that tie the London-based banking giant to its African subsidiary.

In May last year, Barclays sold a 12.2 percent stake in Barclays Africa as part of a strategic plan to reduce its 62 percent stake in its Johannesburg-based unit. The divestment will allow Barclays to free-up capital and focus on core markets in the United Kingdom and the United States.

With the breakup agreement, Barclays is poised to reduce its Barclays Africa stake further below 50 percent pending approval by South African regulators. Barclays plans to retain a 10 to 20 percent stake in Barclays Africa even after the separation is completed. billion through a combination of share or bond sale and global depository receipts, according to Reuters.

The bank’s announcement came after it released its 2016 financial statement, last month, showing that after-tax profit rose by 23 percent year-on-year to N129.65 billion, while gross earnings rose 17 percent to N508 billion.

Nigerian banks are planning to raise capital amidst the surge in non-performing loans driven mainly by the country’s sour economic conditions. Zenith Bank said its NPL ratio rose to 3 percent from 2.2 percent in 2015.