Cape Times

Absa is reclaiming its identity

- Dineo Faku

BARCLAYS Africa announced yesterday that it planned to reclaim its African identity by changing its name back to Absa across the continent in the next two years.

Chief executive Maria Ramos said the rebranding was part of a journey in building a banking group Africa could be proud of. Ramos said Barclays Africa spent more than a year conducting extensive research among its clients and customers on the proposed rebranding.

“We spoke to more than 130 000 customers and clients on the name change. This is not Absa as you know it. It’s Absa that reflects African culture,” said Ramos.

The name change is required as part of the separation of Barclays Africa from London’s Barclays Plc which in 2016 announced that it would sell its majority shareholdi­ng in Barclays Africa over two to three years.

The agreement also made a provision for Barclays Plc to contribute £765 million (R12.44 billion) to fund investment­s required for Barclays Africa to separate from the group.

Ramos said the rebranding was subject to approval by the JSE and a vote by shareholde­rs.

Asief Mohamed, chief investment officer at Cape Town-based Aeon Investment Management said the rebranding may not immediatel­y resonate with other parts of the continent.

“I am sceptical. In South Africa, most people know Absa, and in the rest of Africa there is awareness of Barclays Africa because of the Barclays Plc name. They will have difficulty in brand loyalty in the rest of Africa if they rebrand to Absa,” he said.

The banking giant yesterday reported that group headline earnings rose 4 percent to R15bn for the year ended in December.

It said the South Africa banking headline earnings grew 4 percent to R12.2bn.

Retail and business banking South Africa headline earnings rose 1 percent to R8.8bn due to 16 percent lower credit impairment­s and improved second half revenue growth. Retail Banking headline earnings were flat at R6.54bn, while Business Banking grew 1 percent to R2.3bn.

The company declared a 4 percent higher full year dividend of 1 070 cents.

Wayne McCurrie from Ashburton Investment­s described the results as muted with earnings a share up 4 percent.

“After allowing for separation costs of net R1.9bn, results will be distorted by these separation costs for a while still. Absa was paid R12bn by Barclays to cover these separation costs,” he said.

“The nature and impact of future changes in the legal framework, policies and regulatory action, especially in the areas of financial crime, banking and insurance regulation, cannot currently be fully predicted and are beyond the group’s control. Some of these are likely to have an impact on the group’s businesses, systems and earnings,” the company said.

Barclays Africa shares rose 0.84 percent on the JSE yesterday to close at R200.17.

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